GST hike threatens energy independence

This move (to increase GST) does not support the roadmap of reducing import dependence and will lead to a rise in imports of natural gas for India's committed energy mix of 15 per cent natural gas by 2030, industry says

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The recent hike in goods and service tax (GST) on capital goods used in the oil, gas, and coal bed methane (CBM) sectors has increased operational costs and undermines efforts to reduce import dependence, an industry association said in a letter to Oil Minister Hardeep Singh Puri.

The Federation of Indian Chambers of Commerce and Industry (FICCI) in the September 9 letter to Puri cited the recently approved Oilfields Regulation and Development Act, saying the increase in GST is not aligned with the legislation's objective of providing fiscal stability to upstream exploration and production chases under deemed exports.

"The Oilfields Regulation and Development Act aims to provide fiscal stability to upstream E&P operators; however, the increase in GST is not aligned with this objective,” FICCI said.