Centre likely to bring natural gas into GST fold
Decision may be taken in next GST Council meeting
New Delhi: With States coming on board over GST compensation issue, the Centre is gearing up to get their consent over inclusion of petroleum products under the new indirect tax fold.
Sources privy to the development said that based on Petroleum Ministry's suggestion, the Centre may take up with GST Council the issue of bringing natural gas under the Goods and Services Tax (GST) regime to begin with before entire oil and gas sector is brought under it. Though the dates for next GST Council meeting is yet to be finalised, Finance Ministry sources said its due and may take place anytime after the budget presentation. States have been reluctant to consider bringing high revenue generating petroleum products under GST fold.
But the dual tax treatment is affecting the sector and hampering government's plan to develop a gas-based economy in the country. Sources said that with this in mind, a phased approach to inclusion of petroleum products under GST may be adopted with natural gas falling first in the queue. Inclusion of gas would not pose a challenge for the GST Council as it is largely an industrial product where a switch over to the new taxation would not be difficult.
"States are in fairly better position now with GST revenue hitting over Rs 1 lakh crore mark for past few months and Centre has also improved their liquidity position through additional borrowing schemes under Aatmnirbhar Bharat package. This should make phased inclusion of petroleum products under GST easier for the council," said an official source in the oil ministry.