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Punjab slashes VAT on Natural Gas

| | Sultanpur Lodhi
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Punjab slashes VAT on Natural Gas

Wednesday, 11 September 2019 | PNS | Sultanpur Lodhi

nIn a significant decision aimed at encouraging industries to shift to the eco-friendly gas, the Punjab Cabinet on Tuesday decided to cut down VAT (value added tax) on natural gas, in Gaseous State other than Compressed Natural Gas, from 14.3 to 3.3 percent.

The over 10 percent decrease VAT came as the state witnessed a sharp decline in the VAT collection on natural gas — from ` 105.77 crore in 2014-15 to ` 1.84 crore till June 2019.

The move would help cut down on industrial pollution in the state, said the Chief Minister Captain Amarinder Singh said, while chairing the cabinet meet.

At present, the VAT on natural gas is 13 percent-plus-10 percent surcharge, which is 14.30 percent in Punjab.

The major consumer of gas is National Fertilisers Limited (NFL), which uses the gas at its plants at Bathinda and Nangal. Natural Gas is also consumed in very small quantity by select industries and the transport sector.

Before March 2015, VAT rate on Natural Gas was 5.5 percent-plus-10 percent surcharge, that is 6.05 percent. From March 2015 onwards, VAT rate on natural gas was increased from 6.05 to 14.3 percent. “Due to increase in VAT rate, NFL started inter-state billing of Natural Gas, due to which VAT collection on Natural Gas decreased. The VAT collection on natural gas, from the years 2014-15 to 2018-19, came down considerably from ` 105.77 crore to `  5.67 crore, which had further shown a steep decline to ` 1.84 crore till June 2019, during financial year 2019-20,” pointed the spokesperson.

Notably, the NFL is purchasing natural gas worth Rs 300 crore per month from Gujarat, on which CST of ` 45 crore per month at the rate of 15 percent is being paid.

 In case the VAT rate on natural gas is decreased, the natural gas supplier may start billing of natural gas to NFL from Punjab, which can lead to increase in PVAT collection on natural Gas, said an official spokesperson, explaining the rationale behind the Cabinet decision.


Taking a significant decision with respect to housing allotment, the Cabinet has decoded to restrict flats for allotment of land under Employees Cooperative Group Housing Societies (ECGHS) scheme to 40 per acre.  Spokesperson said that the decision to put a curb on per acre flats, allotted to the ECGHS by various development authorities, had been taken in pursuance of the announcement made by the Chief Minister during his speech in the Punjab Vidhan Sabha on February 20, 2018, and in line with the notification issued on October 18, 2018.


Cabinet has approved three percent reservation of residential plots for government employees under PUDA and special authorities’ jurisdiction.  In line with the Chief Minister’s approval dated June 15, 2017, the Cabinet approved the reservation policy for allotment of land or sites falling under the jurisdiction of PUDA and other Special Authorities.

  The reservation policy envisages three percent residential plots, houses or apartments for allotment to Government Employees by development authorities, Municipal Corporations, Improvement Trusts or any other Government agency, said the spokesperson.

Employees of Punjab Government, its Boards and Corporations, Punjab and Haryana High Court, employees or officials of Apex institutions working under Cooperative Department of Punjab Government like Markfed, Milkfed, Punjab State Cooperative Bank, Housefed etc, and employees of Universities funded by Punjab Government (except private universities), would be eligible for reservation under the policy.


To facilitate increased efficiency and prompt dispensation of justice by the state’s judicial system, the Cabinet gave approval for the creation of 24 posts of Court Manager Grade-II in Subordinate Courts across the state.

The move comes in response to a proposal received from the Registrar, the High Court, the Home Affairs and the Justice Department seeking creation of these posts.


As a special case and in an attempt to mitigate financial hardships faced by the family of the deceased officer, the Cabinet has given ex-post facto approval to disbursement of financial benefits of nearly Rs 31 lakh to the legal heirs of Mohali’s zonal licensing drug authority late Neha Shoree, who was shot dead on duty on March 29, this year. 

The Cabinet felt that Neha Shoree had performed her duties fearlessly, with valour, dedication and hard work, and therefore, decided to grant ex-post facto approval for financial benefits including ex-gratia of Rs 20 lakh, GIS saving amount of Rs nine lakh besides death-cum-retirement gratuity of Rs 6.99 lakh, leave encashment Rs 3.28 lakh, GIS Rs 60 lakh, as per rules.

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