Global Statistics

All countries
245,768,802
Confirmed
Updated on 28/10/2021 3:37 am
All countries
221,038,692
Recovered
Updated on 28/10/2021 3:37 am
All countries
4,987,767
Deaths
Updated on 28/10/2021 3:37 am

Global Statistics

All countries
245,768,802
Confirmed
Updated on 28/10/2021 3:37 am
All countries
221,038,692
Recovered
Updated on 28/10/2021 3:37 am
All countries
4,987,767
Deaths
Updated on 28/10/2021 3:37 am

Core states can discuss the early inclusion of natural gas in the GST fold

As GST revenue collection recovers after disruptions caused by the second wave of the Covid pandemic, the Center is likely to initiate a dialogue with states for the inclusion of petroleum products in the new excise tax fold. .

Sources familiar with the development said that based on the Petroleum Ministry’s suggestion, the Center may address with the GST Council the issue of including natural gas under the Goods and Services Tax (GST) regime to start before it is present the entire oil and gas sector. under it.

The 45th GST Council meeting is scheduled for September 17, 2021 in Lucknow. Although the council members will discuss several pending issues, such as the compensation of the states, the revision of the GST rates in the Covid essentials, the reversed fee structure, the Center is likely to accept the case of early inclusion as well. of gas in the new tax fold.

As the revenue position remains strained due to the Covid-19 outbreak, states have been reluctant to consider including high-revenue-generating petroleum products under the GST fold. But with GST collections improving substantially this year remaining above the psychological mark of Rs 1 lakh crore in most months of FY22, the Center sees the right time as the right time to push for fiscal reforms in the oil sector. and gas, as well as the inclusion of gas aid. in plan to develop a gas-based economy in the country.

The inclusion of gas would not pose a challenge to the GST Council, as it is largely an industrial product where the transition to new taxation would not be difficult. The revenue implication for the states is also low in the case of this change.

“The states are in a much better position now with GST revenues exceeding Rs 1 lakh crore over the past few months and the Center has also improved its liquidity position through additional loan schemes. This should facilitate gradual inclusion of petroleum products in the GST for the advice, “said an official source from the Petroleum Ministry.

The GST tax on natural gas would help state oil companies such as ONGC, IOCL, BPCL and HPCL to save a tax burden in the amount of Rs 25 billion as they would get credit on taxes paid for inputs and services. Tax credits are not transferable between the two different tax systems.

The Steering Committee for the Promotion of Local Added Value and Exports (SCALE) chaired by Mahindra & Mahindra MD & CEO Pawan Goenka in their report to the Ministry of Commerce has also fought for the provision of tax credit for natural gas inputs to make their most competitive prices. This could happen once it is listed in GST.

Sources said the council could consider a three-layer GST structure for gas where residential piped natural gas (PNG) is taxed at a lower rate of 5 percent, piped commercial natural gas could be taxed at a average rate of 18 percent and automobiles. Fuel CNG could be taxed at a maximum rate of 28 percent. However, such a proposal has yet to be drafted and could be put on the table once a consensus is reached on including gas in the GST.

Gas sales, including CNG and piped gas supply, attract a VAT ranging from 5 to 12 percent.

As part of its efforts to reach consensus with the states on the launch of GST, the government had decided to exclude five petroleum products (crude oil, gasoline, diesel, ATF, and natural gas) from the list of items included in the GST, but that included products such as cooking gas, kerosene and gasoline in the new regime.

–IANS

sn / dpb

(Business Standard staff may have only modified the title and image of this report; the rest of the content is automatically generated from a syndicated feed.)

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