Oil and Gas Sector Hopes for Inclusion in GST Regime

The oil and gas industry is advocating for inclusion in the Goods and Services Tax (GST) regime, hoping for tax relief and financial stability. An additional duty, the Special Additional Excise Duty (SAED), imposed since July 2022, has significantly impacted the financial health of oil and gas operators, affecting their ability to invest in sustainable and efficient recovery methods.

Key Points:

  • SAED Impact: The SAED, introduced due to high crude prices, is seen as detrimental to the financial stability of oil and gas companies.
  • Ministerial Intent: Oil Minister Hardeep Puri mentioned efforts to include petrol, diesel, and aviation turbine fuel in GST, but the GST Council has not yet made a decision.
  • Skewed Tax Scenario: Non-inclusion in GST leads to a complex tax situation where key inputs are taxed under GST, but outputs are not.
  • Industry Advocacy: Various industry associations have raised the issue with the Ministry of Petroleum and Natural Gas.
  • Consumer Impact: Experts suggest that while immediate price reductions may not occur, the long-term impact could include corrected tax cascading effects and improved profit margins for oil companies, potentially leading to lower consumer prices.

For more detailed updates, stay tuned to industry news and official announcements.

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