Air Quality Commission to seek 5% GST for natural gas

New Delhi: Ahead of the presentation of the Union budget, the Centre's commission for air quality is looking at offering tax incentives to check pollution caused by industry, and will approach the finance ministry soon with the suggestion.ET has learnt that the Commission for Air Quality Management (CAQM) in the National Capital Region and adjoining areas, is set to ask the finance ministry to bring natural gas in the 5% slab under the GST framework, in order to bring down its price. Petroleum products are currently kept outside the GST regime.

In a meeting held on January 20, the CAQM decided that such a move was essential, as it would make the cost of this cleaner fuel more competitive and thus make it more viable for industries to shift to gas over coal and other solid or liquid fuel. The CAQM’s recent reviews have indicated that industrial units were a major contributor to the overall air pollution scenario in Delhi and the rest of the NCR. This can be significantly addressed if industry switches to cleaner gas-based operations.

However, the cost attached to natural gas is a deterrent. Currently, natural gas comes with a 14% central excise duty and value added taxes levied by states ranging from 3% to 24% — all of which pushes up its price and makes it less cost effective for both domestic and industrial use.