By Arun Pratap Singh
Dehradun, 17 Mar: The Uttarakhand government has decided to reduce the Value Added Tax (VAT) on natural gas, providing significant relief to both the common people and industrial units. A notification to this effect has been issued by the Finance Department, and as a result, compressed natural gas (CNG) and piped natural gas (PNG) have become more affordable in the state. The VAT reduction is substantial, with a cut of approximately 50 percent.
It may be recalled that, currently, natural gas in Uttarakhand attracted heavy taxation in the form of VAT. This not only resulted in high costs for consumers but also imposed a heavy burden on industrial units. Recognising this, the government has implemented this reduction as a major relief measure.
The VAT on natural gas in Uttarakhand was as high as 20 percent, which was significantly higher compared to neighbouring states of UP and Himachal Pradesh, where VAT is much lower. The government has now addressed this disparity by reducing the tax burden.
The VAT on both CNG and PNG has been reduced. In neighbouring states, the VAT rates are considerably lower, with Uttar Pradesh levying a 10 percent tax and Himachal Pradesh imposing a 4 percent tax on natural gas. For CNG, the VAT rates in Uttar Pradesh and Himachal Pradesh stand at 12.50 percent and 13.75 percent, respectively.
In comparison, Uttarakhand had so far imposed much higher taxes than these states. However, prioritising revenue growth from natural gas, promoting environmental sustainability, and encouraging pollution-free industrial units under various development schemes, the government has reduced the current 20 percent VAT rate on CNG to 10 percent. Meanwhile, the 20 percent VAT on PNG has been reduced significantly by 5 percent.
This decision is being seen as a proactive step by the Uttarakhand government towards boosting industrial activity, reducing environmental pollution, and easing the financial burden on the citizens.
