December 31, 2019. The Oil Ministry has proposed reducing the goods and services tax (GST) on compressed natural gas (CNG)-driven vehicles to 5% — at par with electric vehicles — from the current 28% to help the government’s drive to popularize gas vehicles. This could mean more than 20% reduction in prices of CNG vehicles.
The Ministry is seeking support from the finance ministry to cut GST rate on CNG vehicles to make them more affordable.
Natural gas emits 25% less CO2 than petrol on every unit of energy produced.
The government aims to raise the share of natural gas in country’s primary energy mix to 15% by 2030 from 6% now.
The Oil Ministry now wants the purchase price of CNG vehicles to go down to encourage more customers to buy them. All vehicles, except EVs, attract 28% GST currently. The GST Council had in July cut the tax rate on EVs to 5% from 12%.