Union Minister of Petroleum and Natural Gas Dharmendra Pradhan has said that the government plans to increase Indraprastha Gas Limited’s (IGL) business from the current Rs 4000 crore to Rs 30,000 crore. The minister added that IGL caters to over 4 lakh commercial vehicles in Delhi, of these vehicles 80,000 are auto-rickshaws, 2.5 lakh taxis and 1 lakh commercial buses, this number does not include private vehicles which use Compressed Natural Gas (CNG). Recently the price of CNG was hiked by 35 paise per kg and the price of Piped Natural Gas (PNG) was hiked by 81 paise last month in the National Capital Region (NCR). IGL, which distributes both the gasses in the national capital has said that the prices were hiked due to rising operational costs.
The Goods and Services Tax (GST) Council had decided to include natural gas, which would include both PNG and CNG, in the GST regime in order to provide some relief to the oil and gas sector. Goods and services used by the gas industry will be subject to GST, but the sale and supply of petroleum and gas will continue to attract earlier taxes like VAT and excise duty, PTI reported.
Finance Minister Arun Jaitley has said, ”There is an agreement that natural gas can be included in the GST. As natural gas is an industrial product there won’t be any problem in its inclusion”. The GST Council is expected to meet on June 30, hours before the tax is rolled out.
If natural gas is included in the GST then the tax paid on inputs and services used to produce the gas can be set off against taxes on its sale. This would reduce the losses of the industry by nearly 20 percent, according to PTI.