The Assam government, in its Budget 2026 presented on July 10, proposed a significant reduction in the Value Added Tax (VAT) on piped natural gas (PNG) from the current 15% to 5%. This move aims to encourage the use of cleaner fuel and reduce pollution across the state.
Key Announcement in Assam Budget 2026
Finance Minister Ajanta Neog presented the budget for the fiscal year 2025-26 in the Assam Legislative Assembly. Among the key proposals, the reduction in VAT on PNG is expected to make natural gas more affordable for households and commercial establishments. The minister stated that this step aligns with the state's commitment to promoting environmentally friendly energy sources.
Impact on Consumers and Environment
The VAT cut from 15% to 5% represents a 10 percentage point reduction, which will directly lower the cost of piped natural gas for end-users. This is anticipated to boost the adoption of PNG as a cooking and industrial fuel, reducing reliance on more polluting alternatives like coal and wood. According to government officials, the measure is part of a broader strategy to improve air quality in urban and semi-urban areas.
Reactions and Expectations
Industry experts have welcomed the proposal, noting that it will provide relief to households and encourage more connections to the PNG network. "This is a progressive step that will not only reduce energy costs for consumers but also contribute to the state's environmental goals," said an industry analyst. The Assam government expects the move to increase PNG penetration, which currently stands at around 15% of urban households.
The reduction is subject to approval by the state legislature. If enacted, it will take effect from the new fiscal year starting April 1, 2026.
