Clarity on GST rate key likely to determine benefits for gas users

For now, analysts expect industrial users, city gas distributors and utilities to benefit

Gas utilities and city gas distribution (CGD) firms have done well over the last two days even as overall market sentiment has been weak. The optimism is driven by Prime Minister Narendra Modi’s statement that the government is looking to eliminate the cascading effect of different taxes on gas (across states) to reduce cost and increase usage.

Currently, the value-added tax (VAT) in major gas centres like Delhi, Maharashtra, Gujarat, and Uttar Pradesh is nil, 13.5 per cent, 15 per cent, and 10 per cent, respectively, for piped natural gas (PNG), while an additional excise of 14.42 per cent is imposed