India’s oil industry seeks lower GST rates in upcoming Budget
The Indian oil and gas industry is gearing up for the upcoming Budget 2026-27, with high hopes of being included in the Goods and Services Tax (GST) framework at a lower rate. The industry has been seeking the inclusion of crude oil and natural gas under the GST at a lower slab of 5% to improve the ease of doing business. This move is expected to bring significant benefits to the industry, including reduced costs and increased competitiveness.
According to Kapil Garg, Founder of Oilmax Energy, “We remain hopeful of the inclusion of petroleum within the GST framework.” This sentiment is echoed by other industry players, who believe that the inclusion of oil and gas under GST will simplify the tax structure and reduce the compliance burden. The current tax regime for the oil and gas industry is complex, with multiple taxes and cesses being levied on different products. The inclusion of oil and gas under GST is expected to simplify this structure and reduce the tax burden on the industry.
The industry is also seeking compensation for the under-recoveries made on LPG sales. As per an ICRA executive, the industry may seek compensation for the losses incurred on LPG sales, which are currently subsidized by the government. The under-recoveries on LPG sales have been a significant burden on the industry, and the compensation sought by the industry is expected to help mitigate these losses.
The inclusion of oil and gas under GST is also expected to benefit the government, as it will increase the tax revenues and improve the ease of doing business. The government has been working towards simplifying the tax structure and reducing the compliance burden on industries, and the inclusion of oil and gas under GST is a step in this direction.
The oil and gas industry is a significant contributor to the Indian economy, and the inclusion of oil and gas under GST is expected to have a positive impact on the industry. The industry is hoping that the government will consider their demands and include oil and gas under GST at a lower rate in the upcoming Budget.
The demand for the inclusion of oil and gas under GST is not new, and the industry has been seeking this for several years. However, the government has been hesitant to include oil and gas under GST due to the potential revenue loss. The government earns significant revenues from the taxes and cesses levied on oil and gas products, and the inclusion of oil and gas under GST may reduce these revenues.
Despite the potential revenue loss, the industry believes that the inclusion of oil and gas under GST will have a positive impact on the economy. The simplified tax structure and reduced compliance burden are expected to increase the competitiveness of the industry and attract more investments.
The upcoming Budget 2026-27 is expected to be a significant one for the oil and gas industry, and the industry is hoping that the government will consider their demands. The inclusion of oil and gas under GST at a lower rate is expected to be a major boost to the industry, and the industry is hopeful that the government will take a positive decision in this regard.
In addition to the inclusion of oil and gas under GST, the industry is also seeking other concessions and incentives in the upcoming Budget. The industry is hoping that the government will reduce the taxes and cesses levied on oil and gas products, and provide other incentives to promote the growth of the industry.
The oil and gas industry is a critical sector of the Indian economy, and the government’s decisions in the upcoming Budget will have a significant impact on the industry. The industry is hoping that the government will take a positive decision and include oil and gas under GST at a lower rate, and provide other concessions and incentives to promote the growth of the industry.
In conclusion, the Indian oil and gas industry is seeking the inclusion of crude oil and natural gas under GST at a lower slab of 5% in the upcoming Budget 2026-27. The industry is hoping that the government will consider their demands and include oil and gas under GST to improve the ease of doing business and reduce the compliance burden. The industry is also seeking compensation for the under-recoveries made on LPG sales, and other concessions and incentives to promote the growth of the industry.
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