Chandigarh reduces natural gas VAT from 12.5% to 5%

The Chandigarh Administration has reduced the Value Added Tax (VAT) on natural gas from 12.5 per cent to 5 per cent, effective from midnight on September 18, 2026. This measure is intended to provide tax relief to consumers of Compressed Natural Gas (CNG) and Piped Natural Gas (PNG), potentially making these cleaner fuel options more affordable and encouraging the expansion of natural gas infrastructure in the Union Territory.

Regarding the GOBARdhan Scheme, the Ministry of Petroleum and Natural Gas clarified that while the procurement price for Compressed Biogas (CBG) has increased by approximately 43 per cent—from Rs 1,478 to Rs 2,110 per MMBtu—this change is aimed at providing stable pricing for producers. The Ministry stated that the higher procurement cost will not result in a significant price increase for CNG or household PNG consumers, as affordability support is provided and costs are distributed across a larger domestic gas pool.