Dehradun – The Uttarakhand government has reduced Value Added Tax (VAT) on Piped Natural Gas (PNG) and Compressed Natural Gas (CNG), making them more affordable for consumers. The VAT on PNG has been slashed to 5%, while CNG will now be taxed at 10%, down from the previous 20%. The Finance Department issued a notification on Monday, and the new rates have come into effect immediately.
CNG Now Cheaper Than in UP and Himachal
With the revised VAT rates, CNG in Uttarakhand is now cheaper than in neighboring Uttar Pradesh and Himachal Pradesh. Previously, higher prices in the state led vehicle owners to refuel in neighboring states, reducing local consumption and impacting revenue.
Currently, Himachal Pradesh levies 10% VAT on PNG and 13.75% on CNG, while Uttar Pradesh applies a 4% VAT on PNG and 12.5% on CNG. The latest tax revision makes Uttarakhand’s rates more competitive.
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Boost to Consumption and Environmental Protection
The government aims to promote the use of natural gas for environmental benefits and increased consumption. Despite an expected immediate revenue loss of ₹15 crore due to the tax cut, authorities anticipate that higher consumption will compensate for this in the long run. Previously, the state generated around ₹35-38 crore annually from the 20% VAT on PNG and CNG.
