Modi 3.0 may include the gas sector under GST, with GAIL and MGL to be the main recipients

According to research, one of the significant developments in the Modi 3.0 government could be bringing the gas sector under the GST ambit. The US brokerage maintains a positive outlook on the gas industry and chooses Mahanagar Gas Limited (MGL) and Gas Authority of India Ltd. (GAIL, India) as its two best investments.

The government could be reviving talks to bring natural gas under the purview of the Goods and Services Tax (GST), as per the report. The timeline for the implementation of the same is uncertain, however, if implemented, there could be a series of benefits.

Currently, gas sees a slew of taxes: state VAT, central sales tax and central excise duty. The gas value chain has many input and output taxes, especially as a result of the difference in taxation between states. Switching to GST would improve tax inefficiencies.

Expert says that, the gas/LNG that is bought in Gujarat, but sold in other states sees 15 percent input tax. There is no VAT imposed on CNG in Delhi, but in Maharashtra, Gujarat and UP, the VAT imposed is between three to five percent.