The government, in an effort to make prices cheaper and uniform across the country, is committed to bringing natural gas under the GST regime, says Prime Minister Narendra Modi. India is looking to cut energy import dependence and diversify imports.
The Federation of Indian Petroleum Industry (FIPI) had earlier said that the non-inclusion of natural gas under GST regime is having an adverse impact on its prices due to stranding of taxes in the hands of gas producers/suppliers, and is also impacting natural gas-based industries due to stranding of legacy taxes paid on it. The FIPI pointed out that inclusion of natural gas under the GST ambit will have a positive impact on gas-based industries, promote usage of the fuel and avoid stranding of taxes.
In a pre-Budget memorandum, the body said the value-added tax (VAT) rate on natural gas is very high in different states – 14.5% in Uttar Pradesh and Andhra Pradesh, 15% in Gujarat and 14% in Madhya Pradesh. “Since gas-based industries do not get the benefit of a tax credit of VAT paid on purchase of natural gas, it is resulting in an increase in the cost of production of such industrial consumers and would have an inflationary effect on the economy.”
Modi, during the foundation stone laying of various key projects of oil and gas sector in Tamil Nadu via video conferencing, said India was spending Rs 7.5 lakh crore over five years to build its oil and gas infrastructure, and will generate 40% of all its energy from renewable sources by 2030.
“In 2019-2020, India pointed over 85% of oil and 53% of gas to meet its domestic demand,” he highlighted. “I don’t want to criticize anyone, but I want to say, had we focused on these projects much earlier, our middle class would not be burdened.”
The prime minister said India is increasing its share of energy from renewable sources. “By 2030, 40% of all energy will be generated from green energy sources. We are eager to increase the share of gas in our energy basket from 6.3% currently to 15%,” he said. “India is now increasing focus on ethanol to help farmers and consumers. We plan to become the leader in the solar power sector and encouraging public transport to make people’s lives productive and easy.”
Modi added that solar pumps are getting more popular and are helping farmers greatly. “India is working to meet its growing energy demand and is also reducing our energy import dependence.”