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The Chandigarh Administration has reduced the rate of Value Added Tax (VAT) on natural gas from 12.5 per cent to 5 per cent, effective from midnight of September 18, 2026.
According to the release, the decision will provide tax relief to consumers using Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) in the Union Territory of Chandigarh. The reduction in VAT is expected to make natural gas more affordable in Chandigarh and give further impetus to the development and expansion of natural gas infrastructure in the city. The administration said the move will also encourage wider availability and adoption of cleaner fuel options in Chandigarh. Meanwhile, the revised pricing framework for Compressed Biogas (CBG) under the GOBARdhan Scheme is aimed at providing a stable price to producers while keeping the impact on CNG and household PNG consumers negligible, the Ministry of Petroleum and Natural Gas said. Ministry was rejecting a newspaper report which suggested that the revised price of Compressed Biogas (CBG) under the GOBARdhan Scheme could place a significant additional burden on CNG and household PNG consumers. The ministry said the higher procurement price for CBG would not translate into a similar increase for consumers as the government is providing affordability support and the cost is being spread across a substantially larger domestic gas pool. Under the existing system, the price paid to CBG producers is linked to 85 per cent of the retail selling price of CNG and currently works out to around Rs 1,478 per one million British thermal units (MMBtu), the ministry said. Under the revised GOBARdhan framework, the CBG price has been fixed at Rs 2,110 per MMBtu, an increase of about 43 per cent. However, the ministry clarified that this is the procurement price paid to producers and is not the price directly paid by CNG or household PNG consumers. (ANI)
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