At India Energy forum, Oil and Petroleum Minister Dharmendra Pradhan has urged Finance Minister Nirmala Sitharaman to bring jet fuel and natural gas under the ambit of GST to reduce multiplicity of taxes and improve the business climate.
“On non-occasion I have an appeal to the Union Finance Minister to look into the present condition of our industry, at least Natural Gas and Aircraft turbine fuel must be brought under the ambit of GST. With aviation industry progressing in high speed and natural gas needed for processing clean energy which will further showcase our commitment to COP 21, I appeal to the honourable minister to do the needful", expressed Dharmendra Pradhan.
When GST was introduced on July 1, 2017, amalgamating over a dozen central and state levies, five commodities - crude oil, natural gas, petrol, diesel, and aviation turbine fuel (ATF) - were kept out of its purview given the revenue dependence of state governments on this sector.
The Aviation Ministry has constantly appealed for jet fuel to be brought under GST as any changes in international oil rates affect the domestic jet fuel prices which in turn lead to expensive tickets. This further inconveniences the general public and fails to make flying as a viable option for all. Natural gas is widely used as industrial input by a variety of industries – from power to steel. If included under GST, then it would help eliminate the cascading impact of taxes, thus bringing down prices of CNG and piped natural gas. It will also lead to a supply of clean energy which will further PM Modi's vision envisaged at COP 21.
Under the existing structure, these items attract the Centre's excise duty and a state's value-added tax (VAT). Both these and all other levies will get subsumed under GST if they are brought under its ambit. Speaking at the same forum, Finance Minister Nirmala Sitharaman spoke about India’s commitment to facilitate better business climate and attract more and more investments,
“I am conscious that we are talking about uncertainties which will prevail. But it is understandable and without taking any sides, I can tell you that commitments will be honoured. Therefore Investors need not have that concern."