Government Moves to Bring Natural Gas and ATF Under GST Framework; Finance Ministry and Oil Ministry in Active Deliberations
The government has initiated the process to bring natural gas and Aviation Turbine Fuel (ATF) under the Goods and Services Tax (GST) framework. The Finance Ministry is holding meetings with the Oil Ministry to discuss the details, as per media sources.
Active deliberations are ongoing with all stakeholders, with two meetings conducted over the past two months.
The Oil Ministry has made a presentation to the Finance Ministry outlining the impact of including natural gas and ATF under GST.
The Finance Ministry has requested additional data from the Oil Ministry. Major states, including Gujarat, have shown agreement with the proposal.
A final proposal is expected to be presented to the GST Council in its upcoming meeting.
Currently, the Value Added Tax (VAT) on natural gas ranges from 14% to 24%, while the VAT on ATF ranges from 5% to 18%.
The Central Government levies a basic excise duty of 11% on ATF.
The government also collects cess on both natural gas and ATF.
Update
The GST Council’s Fitment Panel has not yet considered the proposal to include natural gas and aviation turbine fuel (ATF) under GST, as per CNBC TV18.
The GST Council can only consider the request for inclusion of natural gas and ATF under GST based on the recommendation of the Fitment Committee.
Officials from the Oil Ministry met with officials from the Finance Ministry, but no commitment was made on referring the matter to the Fitment Panel.
The Finance Ministry expressed concerns over past disagreements with states regarding the inclusion of natural gas and ATF under GST.
During its 45th meeting, the GST Council stated that it is up to the Council to decide on the rates and inclusion of items under GST as and when it deems appropriate.
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