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CNG Price Cut Likely: The Kirit Parekh Committee formed on gas prices has recommended the central government to reduce the excise duty on CNG. In its recommendations, the committee has told the government that until a decision is taken to bring natural gas under the purview of GST, the government should charge less excise duty on CNG.
14% excise duty on CNG
Natural gas is currently out of GST. At the same time, from Central Excise Duty to VAT is charged on petroleum products. The central government does not levy excise duty on natural gas. But 14 percent excise duty is charged on CNG, then the state government imposes VAT up to 24.5 percent. The Kirit Parikh Committee has recommended the government to bring natural gas under the ambit of GST. The committee assumed that its states would agree. In such a situation, to implement this, the Center should compensate the states for any loss for 5 years.
Petroleum products are out of GST
When GST came into force on July 1, 2017, petrol diesel, ATF were kept out of GST. The Kirit Parikh Committee believes that until the gas is brought under the ambit of GST, the government should reduce the excise duty on CNG so that the consumers can get relief.
$4-6.5/unit gas price recommendation
The Kirit Parikh Committee has also suggested removal of cap on gas price for the next 3 years. Along with this, the committee has recommended fixing the price band of natural gas produced from old gas fields in the country at $ 4 to 6.5 per unit (mmBtu).
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