The Punjab government on Friday reduced value added tax (VAT) on natural gas to 3 per cent from 14.3 per cent.
With this, Punjab has become the state with the lowest VAT on natural gas in the northern region comprising Haryana, Himachal Pradesh, Rajasthan, Delhi and Chandigarh, an official statement said here.
It will also incentivise industrial units in the state to switch over from polluting fuel to environment-friendly natural gas, thus reducing industrial pollution in the state.
The decision will also give a boost to industrial units in Gobindgarh and Ludhiana to replace conventional fuel, it said.
With the reduction in the rate of VAT, the sale of natural gas in Punjab is likely to increase substantially, thereby yielding increased revenue, the release said.
National Fertilisers Limited is a major consumer of gas and uses it for plants at Bathinda and Nangal.
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