Jharkhand Traders Push for VAT Reduction on PNG Amid LPG Supply Crisis
In response to disruptions in liquefied petroleum gas (LPG) supplies linked to the ongoing conflict in West Asia, traders in Ranchi, Jharkhand, have formally requested a reduction in the value-added tax (VAT) imposed on piped natural gas (PNG). They argue that the dual challenges of supply shortages and elevated tax rates are placing significant strain on both consumers and local businesses.
Wedding Season Demand Intensifies Fuel Crunch
With LPG availability becoming increasingly limited and demand surging during the peak wedding season, many commercial establishments are turning to PNG as a viable alternative. Currently, PNG is priced at approximately Rs 47.38 per standard cubic meter (SCM) in districts such as Ranchi. However, the high VAT rate remains a major deterrent to its broader adoption.
At a recent meeting of the petroleum and explosives sub-committee of the Federation of Jharkhand Chamber of Commerce and Industries (FJCCI), members highlighted that PNG attracts a VAT of around 14% to 15% in Jharkhand. This is notably higher than the 5% rate applied in neighboring Bihar. "Such a tax disparity is unfair to consumers and businesses alike. A reduction in VAT would not only alleviate cost pressures but also encourage the use of cleaner, more sustainable fuel," stated Jaswinder Singh, chairman of the sub-committee.
Businesses Grapple with Soaring Operational Costs
The fuel crisis has forced businesses to navigate severe operational challenges. "We are being squeezed from both sides; cylinder supply is erratic, and PNG is heavily taxed. At Rs 47 per SCM with a 14% to 15% VAT, our input costs have surged by 20% to 25% this season alone," explained Ravindra Puniya, a caterer based in Ranchi. "For large-scale events, we cannot afford fuel shortages, so we are compelled to arrange backup cylinders at premium rates or resort to traditional coal chulhas, which are less efficient and more polluting."
Navjot Alang, joint secretary of the FJCCI, emphasized the widespread impact, noting that "caterers, restaurants, hospitals, temples, gurdwaras, and various other eateries are confronting a severe fuel crunch. The high VAT further exacerbates their operational difficulties."
Government Engagement and Infrastructure Hurdles
Prashant Singh, deputy general manager at GAIL, confirmed that the issue has been formally raised with the state government. "Currently, around 14% VAT is applicable on PNG. We have submitted a request to the state government for a reduction in this tax rate," he said.
Additionally, FJCCI members pointed to delays and bureaucratic obstacles in obtaining PNG connections. They urged authorities to streamline the application and activation processes, particularly for locations where connections have already been installed but remain inactive.
The collective appeal from Jharkhand's business community underscores the urgent need for policy intervention to mitigate the economic and logistical impacts of the LPG supply disruption, while promoting the adoption of cleaner energy alternatives like PNG.
