TO Shastri Bhawan is curt and to the point. He wants LNG to be classified as a Declared Good and brought within the Central Sales Tax Act, 1956. In plain-speak a Declared Good is something produced only in some states but required across the country. i.e. oil, coal, steel. Once an item is classified as a Declared Good, the maximum sales tax levied is just 4%. It can only be collected once and no state can impose sales tax on a Declared Good in excess of the 4% levied by the Central Sales Tax Act. Says Mathur: "If, like crude oil, natural gas is classified as a Declared Good, on the basis of its use by the common man, it is certain that LNG will become a viable fuel and feedstock and the country will be able to take advantage of supplementing the deficit through imports from sources near to the east and west coasts of the country like Qatar, Oman, Abu Dhabi, Malaysia, Brunei, Indonesia and Australia." Mathur argues that natural gas meets the criteria of a Declared Good because, like crude oil, it is a primary source of energy: only states with sea ports can import LNG and inter-state transportation is a must for those that do not have sea ports or other import facilities. Mathur cites his experience of trying to lower the LNG price with his supplier RasGas of Qatar. He reveals that overseas suppliers are "very critical" of the high taxes on LNG in India. "Suppliers have emphasised that while they can give most competitive prices for LNG they cannot make any further reduction in prices to subsidise the high taxation structure prevalent in India."
TO Shastri Bhawan is curt and to the point. He wants LNG to be classified as a Declared Good and brought within the Central Sales Tax Act, 1956. In plain-speak a Declared Good is something produced only in some states but required across the country. i.e. oil, coal, steel. Once an item is classified as a Declared Good, the maximum sales tax levied is just 4%. It can only be collected once and no state can impose sales tax on a Declared Good in excess of the 4% levied by the Central Sales Tax Act. Says Mathur: "If, like crude oil, natural gas is classified as a Declared Good, on the basis of its use by the common man, it is certain that LNG will become a viable fuel and feedstock and the country will be able to take advantage of supplementing the deficit through imports from sources near to the east and west coasts of the country like Qatar, Oman, Abu Dhabi, Malaysia, Brunei, Indonesia and Australia." Mathur argues that natural gas meets the criteria of a Declared Good because, like crude oil, it is a primary source of energy: only states with sea ports can import LNG and inter-state transportation is a must for those that do not have sea ports or other import facilities. Mathur cites his experience of trying to lower the LNG price with his supplier RasGas of Qatar. He reveals that overseas suppliers are "very critical" of the high taxes on LNG in India. "Suppliers have emphasised that while they can give most competitive prices for LNG they cannot make any further reduction in prices to subsidise the high taxation structure prevalent in India."
