Pradhan hopes Budget will signal inclusion of ATF, natural gas in GST

Oil Minister Dharmendra Prhan on Thursday hoped that Finance Minister Nirmala Sitharaman will signal inclusion of jet fuel and natural gas under ambit of GST to reduce multiplicity of taxes and improve business climate.

When Goods and Services Tax (GST) was introduced on July 1, 2017, amalgamating 17 central and state levies, five commodities namely crude oil, natural gas, petrol, diesel, and aviation turbine fuel (ATF) were kept out of its purview given revenue dependence of state governments on this sector.

"Our expectation is that in coming Budget, ATF and natural gas is included in GST," he said at a FICCI conference here.

Finance Minister is scheduled to present Union Budget for 2020-21 fiscal on February 1.

RE | Steel Sector: Dharmendra Prhan Asserts That India Has Become A Net Exporter Of Steel

Including ATF and natural gas will not just help companies set off tax that y paid on input but will also bring about uniformity in taxation on fuels in country.

Including natural gas in GST is said to be one of biggest drivers of not just consumption but will also incentivize producers to spend more on finding and producing more gas as well as incentivize importers to bring in more LNG.

ATF makes up for almost half of cost of an airline and rates vary from state to state depending on local VAT.

A uniform GST would also push usage of environment-friendly natural gas, whose share in energy basket government wants to increase to 15 per cent by 2030 from current 6.2 per cent.

Prhan has been making a case for GST Council - highest decision-making body of new indirect tax regime - to take a decision in favour of se two fuels at earliest.

RE | Dharmendra Prhan Urges Steel Industry To Become Environment-Friendly & Boost Production

Council is heed by Union Finance Minister and comprises representatives of all states and union territories.

Under existing structure, both natural gas and ATF attract Centre's excise duty and a state's value-ded tax (VAT). Both se and all or levies will get subsumed under GST if y are brought under its ambit.

decision on ir inclusion depends on financial position of states as revenues from se five petroleum products constitute a substantial chunk of state government finances.

Barring a few, most of states are incurring revenue shortfall as GST subsumed a dozen of ir taxes, introducing single levy, in a bid to simplify taxation system and remove cascing effect of 'tax on tax' in country.

According to industry, keeping ATF and natural gas out of GST net was increasing cost of se products as a tax on inputs is not being credited against sale of se products, which ultimately, ds to cost of production.

aviation ministry has time and again sought inclusion of ATF under GST as any surge in international oil rates gets reflected in domestic jet fuel prices, leing to costlier air tickets.

Natural gas is widely used as industrial input by a variety of industries - from power to steel - and it coming under GST would help eliminate cascing impact of taxes, bringing down prices of CNG and piped natural gas. 

RE | 'Russia An Important Partner In India's Economic Progress' Asserts Dharmendra Prhan

RE | India Has To Be Self-sufficient In High-Gre Steel: Dharmendra Prhan To Industry