NEW DELHI: City gas distribution (CGD) companies in Uttar Pradesh have requested central government to bring CNG/PNG under the ambit of goods and services tax (GST), as taxes levied in UP are way higher than other states, according to the sources.
Customers are choosing diesel over petrol and CNG, hence impacting the bottom line of these firms in UP, say sources. “CGDs in UP pay 10% while purchasing CNG, while supplying it they charge 12.5% VAT. They also have to pay an extra 14% excise duty, so the customers are heavily taxed here,” a source in the know told TNIE. He further said due to higher CNG prices, people are opting for diesel over petrol and CNG. “There shouldn’t be any excise duty on CNG as we are not indulged in the manufacturing process. We just compress it and supply, yet we have to pay 14% excise duty,” the source added.
Meanwhile, another source said in case of PNG, which is used for household purposes, no VAT credit is given to the consumers. VAT is levied at the rate of 10% on PNG. On the other hand, LPG comes under the GST ambit and a tax of 18% is levied on LPG for commercial use. Consumers of LPG get the credit, so PNG is costlier for the customers, he added.
As per a government official, who didn’t want to be quoted, said CNG and PNG should be brought under GST so that uniformity in taxes could be brought across the country. Many states impose less VAT on CNG, in UP, VAT is quite high. “Either the Centre should lower excise duty on CNG or bring it under the GST net. The state government should also consider lowering VAT on CNG/PNG. The higher taxes defeat the very purpose of the government to promote environment-friendly fuel,” the official added.