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Natural gas may come under GST in 2018

Natural gas may come under GST in 2018

It literally took the country by storm six months back when dozens of taxes and levies were rolled into one, but as the new goods and services tax (GST) stabilises, its ambit is now likely to be increased by including natural gas in next couple of months.

On July 1, when the new national sales tax was implemented, it was decried as technologically tedious and expensive and had potential to torpedo political prospects of the ruling BJP.

However, the government made numerous changes, including easing the tax filing process and reducing rates on over 200 items, to save the day for the party in Prime Minister Narendra Modi’s home state Gujarat.

While GST transformed India into ‘one nation, one market’ at the “stroke of midnight” on June 30, real estate as well as crude oil, jet fuel or ATF, natural gas, diesel and petrol were kept out of its purview. This meant that the products continued to attract duties like central excise and VAT.

That may well change in 2018, at least for natural gas.

A top revenue department official said as the Centre and states are assured of revenue flows, natural gas can be the next big item to be included.

“To me it appears that out of the 5 petroleum products, natural gas is an easier candidate for bringing into GST,” he said, adding that a 5 per cent GST, equivalent to that being charged on coal, will benefit states in reducing price of CNG as well as cooking gas piped into kitchens.

The Centre may try to bring up inclusion of natural gas at the next GST Council meeting in January.

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