Inclusion of Natural Gas in GST Advocated by GAIL Chairman

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In a recent interview, Sandeep Kumar Gupta, Chairman of GAIL (India) Limited, emphasized the critical need for policy reforms to accelerate the integration of natural gas into India’s energy landscape. With the government setting ambitious targets to increase natural gas’s share in the energy mix to 15% by 2030, Gupta highlighted several key initiatives necessary to achieve this goal.

Gupta, who will take over as CEO of GAIL in 2022, stressed the importance of mandating the use of natural gas in key sectors such as refineries and steel production. He underscored the need to align emission considerations with the merit order for electricity dispatch to enhance the competitiveness of gas-based power vis-à-vis coal-based supply.

One of Gupta’s pivotal recommendations is the inclusion of natural gas under the GST regime. He argued that subjecting natural gas to GST, along with extending production-linked incentives (PLI) to LNG-powered vehicles and reducing GST on CNG-powered vehicles to 5%, would foster a more conducive environment for the adoption of cleaner energy alternatives.

Addressing concerns about global LNG market dynamics, Gupta expressed confidence in the ample supply of LNG but highlighted the impact of OPEC+ production limits on LNG prices, which are closely linked to crude oil prices. He called for a reconsideration of these limits to stabilize LNG prices and ensure energy security.

Despite challenges in increasing domestic gas demand, particularly in sectors like power and fertilizers, Gupta remains optimistic about the potential for growth. He emphasized the importance of policy support in driving demand through measures such as GST rationalization, tax relief on compression, and incentivizing the transition to CNG.

Looking ahead, Gupta outlined GAIL’s broader vision of becoming a globally significant integrated gas value chain corporation. He highlighted plans to expand the national gas grid, invest in large-scale petrochemical operations, and leverage India’s potential as a manufacturing hub for petrochemicals.

In conclusion, Gupta’s advocacy for policy reforms underscores the imperative of accelerating India’s transition towards cleaner and more sustainable energy sources. By implementing strategic initiatives and regulatory reforms, India can unlock the full potential of natural gas and achieve its energy security and climate goals.


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Pooja Gupta

CA Pooja Gupta (CA, ISA, having 15 years of experience. Educator and Digital Creator

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CA Pooja Gupta (CA, ISA, having 15 years of experience. Educator and Digital Creator

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