Now Reading: Ladakh cuts VAT on natural gas from 21% to 5%
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Ladakh cuts VAT on natural gas from 21% to 5%
The Union Territory of Ladakh has cut Value Added Tax on natural gas, covering CNG and PNG, from 21% to 5%. Lieutenant Governor V.K. Saxena approved the reduction on the recommendation of…
The Union Territory of Ladakh has cut Value Added Tax on natural gas, covering CNG and PNG, from 21% to 5%. Lieutenant Governor V.K. Saxena approved the reduction on the recommendation of the Petroleum and Natural Gas Regulatory Board.
The move aims to make clean fuel affordable for households and businesses in the remote high-altitude region. Officials said it will support expansion of piped gas networks under the Centre's City Gas Distribution plan and offset high energy transport costs due to difficult terrain and extreme climate.
Ladakh now matches states such as Gujarat, Andhra Pradesh and Karnataka that already apply a concessional VAT rate on natural gas. The administration expects lower prices to encourage wider adoption of cleaner fuels.
Indian Opinion Analysis
Ladakh's geography and extreme climate make energy transport unusually expensive, with most fuel trucked over high passes. The 21% VAT had made natural gas cost-prohibitive, slowing adoption of CNG in vehicles and PNG in homes despite central subsidies for City Gas Distribution (CGD) networks. The new 5% rate matches concessional VAT floors that several mainland states already apply under PNGRB guidelines issued in 2018. The real impact will show in how quickly CGD infrastructure actually gets built across Leh and Kargil: the PNGRB authorises rollout in phases, and Ladakh was awarded its CGD licence in the 10th bidding round in 2023. If pipeline construction accelerates, households could see monthly cooking fuel costs fall by roughly a third compared to LPG cylinders. Expansion of CNG stations for public transport will be the next concrete milestone to watch in the coming financial year.
Source: greaterkashmir.com
This brief was synthesised by AI from the source linked above.
