Pradhan reviews GST impact on oil sector

The Minister of State (independent charge) for Petroleum and Natural Gas, Dharmendra Pradhan, reviewed the impact of the Goods and Services Tax (GST) on the oil and gas Sector. A workshop was organised by the Ministry after various public and private sector stakeholders from the upstream, downstream and midstream segments raised several concerns on the likely impact of GST on the oil and gas industry.

While welcoming GST as a progressive form of taxation, the industry representatives referred to several provisions in the GST that could have an adverse impact on the upstream, midstream and downstream sectors. Several petroleum products, namely crude oil, petrol, diesel, ATF and natural gas, have been kept out of the GST's purview. It was brought to the notice of the Ministry by the industry representatives during the workshop that this exclusion will result in huge stranded taxes in the hands of the oil industry due to non-availability of Input Tax Credit towards non-GST products.

Pradhan noted the concerns raised by the industry representatives and assured them that he would convey the same to the Union Finance Minister for an agreeable resolution of the issues involved. Pradhan also asked the industry representatives to raise their concerns with respective state governments, particularly those of oil and gas producing states, to agree to make changes in those provisions pertaining to the oil and gas sector that may affect the new investments and employment generation.