Government is addressing the infrastructure availability issue in oil and gas sector but the affordability problem still remains, says Debasish Mishra, Partner, Deloitte India.
How will bringing LNG under GST impact the sector and when do you see that happen?
The industry has been demanding GST for the last two years, but the states earn a lot of revenue from the oil and gas sector. They have always been reluctant to include oil and gas in the GST regime. The news reports and the honourable minister mentioned that $60 billion worth of investment is lined up for the gas segment alone and that includes trunk pipelines like the Urja Ganga and LPG projects. He also mentioned that 70% of the population will be covered with the City Gas distribution network. The challenge in natural gas consumption has been that of availability and affordability. With this infrastructure in place, the government is addressing the infrastructure availability issue but the affordability problem still remains. So, in the GST regime, the complexity of taxation will come down and the affordability will increase which will help increasing consumption of natural gas. Read more
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