Ladakh reduces natural gas VAT from 21% to 5%

Lieutenant Governor Vinai Kumar Saxena has approved a significant reduction in Value Added Tax (VAT) on natural gas in Ladakh, lowering the rate from 21% to 5%. This measure aims to make Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) more affordable for residents.

The decision supports the expansion of the City Gas Distribution (CGD) network, which intends to provide piped gas connections to households across the Union Territory. The move follows a recommendation from the Petroleum and Natural Gas Regulatory Board (PNGRB), which highlighted that Ladakh’s difficult terrain, extreme weather, and dispersed population increase the costs of energy transport and infrastructure development.

By reducing the tax, Ladakh aligns its natural gas VAT with states such as Gujarat, Karnataka, and Andhra Pradesh. The PNGRB has authorized Bharat Petroleum Corporation Limited (BPCL) to develop the necessary CGD infrastructure in the region.