Gujarat ready to slash sales tax on gas from 20% to 12%

Vol 8, PW 3 (05 May 04) News in Brief

Gujarat will no longer enjoy the distinction of charging the highest sales tax in India on natural gas.

Soon after election results, the state government plans to slash the levy on natural gas from 20% to 12%. The file has been cleared by all departments and is awaiting chief minister Narendra Modis signature, a Gujarat source tells PETROWATCH.

Any reduction in sales tax will be seen as a huge bonanza for natural gas suppliers like Niko Resources, Gujarat Petroleum, and gas transportation companies like GAIL, Gujarat Petronet and Gujarat Gas. But industry wants a bigger reduction.

The state government has put natural gas and fuel oil in one bracket, says a Gujarat Adani source. Sales tax on gas should be reduced to 4% on a par with fuel oil.

Gujarat Adani has emerged as a serious city gas distribution player and wants fuel oil and naphtha users to switch to natural gas for use as feedstock.