Industry flags GST hike on capital goods, warns of impact on energy independence

New Delhi, 11 Sep (PTI) GST’teki oil, gas and coal bed methane (CBM) sectors used in the capital goods, increased operational costs and an industrial association in a letter to the Minister of Petrol Hardep Singh Puri, said that the efforts to reduce import dependence, he said.

Indian Federation of Chambers of Commerce and Industry (FICCI) on September 9 in Puri, the increase in GST, the legislation of the upward flow discovery and production (E&P) operators to provide financial stability of the goal of providing financial stability, saying that the recently approved oil field regulation and Development Act said.

India imports 88 percent of oil needs and roughly half of gas requirements. In order to reduce this import dependence, the government emphasizes increasing internal production.

Ficci, “Petroleum (including natural gas) and coal bed methane (CBM) sectors from 12 percent to 18 percent to 12 percent increase, the increase in oil and CBM operations requiring significant venture capital, thus the investment deterrence and investor confidence negatively affects.”

The authority said that the gas removal of the coal stitches (CBM) has been on a mechanism of income sharing since its establishment and that there is no cost recovery.

“This movement (to increase the GST) does not support the roadmap to reduce import dependence, and until 2030, India’s 15 percent of natural gas will lead to an increase in natural gas imports in the controversial energy mixture of natural gas.” He said.

Additional GST load is contrary to various up flow contracts signed between operators and the government and which are confident in zero tax/duty in local purchases within the scope of zero special duties and exports in imports.

“The law of regulating and development of oil fields aims to provide financial stability to the upward E & P operators, but the increase in GST is not compatible with this target.” He said.

In order to reduce the unnecessary burden on domestic operators, the increase in GST rates and also reduced the tax incidence to NIL in line with E&P contracts.

This said that natural gas will have come a long way to increase local production.

Furthermore, natural gas should be covered by the GST to alleviate the step effect of the value chain in which natural gas is used as an industrial input and increases production costs without any input tax loan.

In a separate letter to the Petroleum Secretary Pancaj Jain, Ficci said that the oil and gas sector is limited to the lack of natural gas loans.

“The increase in GST on goods and services increases the costs further, decays the investment, and the government’s contradiction with the provisions of financial stability in the contracts, as well as affecting the increasing natural gas vision until 2030.”