Value-added tax on industrial CNG reduced to 6%

Value-added tax on industrial CNG reduced to 6%

In a major relief to a host of industries dependent on compressed natural gas (CNG), the state government has finally reduced value-added tax (VAT) on CNG from 15% to 6%. The decision was communicated to the president of Gujarat Chamber of Commerce and Industries(GCCI), late on Thursday. GCCI officials had made several representations regarding this to the state government.

Confirming the development, Shailesh Patwari, president, GCCI, said, “Deputy chief minister, Nitin Patel, has acceded to the previous representations and requests of GCCI to reduce VAT rates on industrial CNG to 6%, while 9% could be refunded. The decision was conveyed on Thursday evening.”

GCCI estimates indicate this will be a major relief for some industries including glass, ceramics, chemicals and textiles, among others. Ceramic industries, in fact, are heavily dependent on CNG for their production units.

“The reduction in tax rates is a major relief to our businesses. In fact, we save on an estimated Rs 75 lakh every single day. This is because some 25 lakh cubic metres of CNG is used for production purposes in Morbi alone,” said KG Kundariya, president, Morbi Ceramics Association.

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