The Uttarakhand government has announced a reduction in VAT on Compressed Natural Gas (CNG) and Piped Natural Gas (PNG), making them more affordable in the state. The VAT on CNG has been slashed from 20% to 10%, while for PNG, it has been reduced to 5%.
Bringing Prices in Line with Neighboring States
Earlier, higher VAT rates made CNG and PNG costlier in Uttarakhand compared to Uttar Pradesh and Himachal Pradesh. In UP, PNG is taxed at 10% and CNG at 12.5%, while in Himachal, PNG is taxed at 4% and CNG at 13.75%. This led many vehicle owners to refill in neighboring states, causing revenue losses for Uttarakhand.
Government’s Decision and Expected Benefits
To boost CNG and PNG adoption and reduce tax-related losses, the government has revised VAT rates. With this reduction, fuel costs will decrease, benefiting vehicle owners and households relying on PNG.
