Currently natural gas falls under value-delivered tax regime, even as biogas draws GST
In a bid to clear the tax anomoly among biogas and natural gasoline when blending to be used as car gas (compressed herbal gas), Finance Minister Nirmala Sitharaman, in her Union Budget, has proposed exemption in excise responsibility on CNG to the quantity equal to the GST paid on biogas or compressed biogas, issue to situations.

Currentlynatural fuel falls under the fee-added tax (VAT) regime, even as biogas draws GST.

The Government has been selling the usage of compressed biogas as an alternative green transport fuel, that is produced through anaerobic decomposition of waste/ biomass sources, inclusive of municipal strong waste.

The Ministry of Petroleum and Natural Gas had launched the ‘Sustainable Alternative Towards Affordable Transportation’ (SATAT) initiative on October 1, 2018, geared toward establishing an eco-machine for the manufacturing of compressed biogas from waste/ biomass assets and sell its use at the side of natural gasoline.

Subsequently, the ministry had issued hints for co-mingling of domestic gas, for supply through city gasoline distribution networks, with compressed biogas. However, due to the tax discrepency, the mixing had no longer taken off.