Home > Industry > Energy > Draft policy seeks lower taxes for LNG, CNG vehicles

MUMBAI : Mumbai

In a bid to boost India’s gas economy, the ministry of petroleum and natural gas on Thursday released a draft city gas distribution policy, which could be adopted by states to facilitate speedy implementation of city gas distribution (CGD) networks and value-added services. Reduced road taxes and value-added tax (VAT) may also be in the offing for gas-driven vehicles.

The draft policy suggests setting up of a committee, under the chairmanship of the chief secretary, which will help formulate policies and streamline the processes for various permissions to develop the CGD infrastructure.

“It will cause setting up of a suitable single-window clearance mechanism for the same in the state for the promotion development of CGD infrastructure and ease of doing business. The committee will also make a suitable mechanism for permissions from state divisions of the Petroleum and Explosives Safety Organisation, NHAI, the railways, etc.," minister of petroleum and natural gas Dharmendra Pradhan said at the National Conclave on Emerging Opportunities in Natural Gas Sector in Delhi on Thursday.

“The government has taken a number of initiatives to give thrust to a gas-based economy. Pricing and LNG marketing freedoms have been given to gas producers. LNG terminal capacity is being augmented and the national gas grid is being developed," he added.

The government will also provide 10,500 crore as viability gap funding for laying pipeline in eastern and north-eastern India. “Gas pipeline network will be ready from Kutch to Kohima and Kashmir to Kochi. Around 4 trillion worth of investment is likely to be made in such projects, which is a challenge as well as an opportunity," said Pradhan.

With a view to promote clean and green fuel, the draft policy is looking to make CNG/LNG as the preferred fuel in public transportation. “State transport corporations will accord priority to CNG/LNG buses, while purchasing new buses and retrofitting in present alternate fuel fleet (which is viable), in order to actively promote the usage of CNG/LNG in the public transport," the document says.

In order to provide user-friendly clean and green fuel CNG and PNG to the general public at affordable and reasonable rates, VAT rates may be reviewed and rationalized with a ceiling of 5%, the document said.

“Further, to promote the safe usage of CNG/LNG in the transport sector, state policy thrust may be given by rationalizing road tax for factory-fitted CNG/LNG vehicles and making them at par with electric vehicles

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