Arun Jaitley Asks States To Cut VAT On Natural Gas, Other Fuel

"The letter by Finance Minister highlights a concern being raised by the manufacturing sector in the country regarding the rise in input costs of petroleum products happening on account of transition to GST regime," an official statement said in New Delhi. Inputs like natural gas are used for power generation as well as in manufacturing fertiliser, petrochemicals and a variety of products like glass. Crude oil is used to make petrol and diesel as also kerosene, LPG and industrial fuels like naptha, fuel oil, and bitumen. While other industries can claim input tax credit or set off tax paid on inputs with that paid on the final product, these industries cannot do so as crude oil, three petroleum products, and natural gas are out of the GST's ambit. This raises the cost for the industries using either of the five products as inputs.

 Mr. Jaitley has written to state chief ministers "urging them to reduce the burden of Value Added Tax (VAT) on petroleum products used as inputs in making of goods after the introduction of GST", said the statement.

Mr. Jaitley has written to state chief ministers "urging them to reduce the burden of Value Added Tax (VAT) on petroleum products used as inputs in making of goods after the introduction of GST", said the statement.