India’s oil industry seeks lower GST rates in upcoming Budget
As the country gears up for the upcoming Budget 2026-27, India’s oil and gas industry is pinning its hopes on the government to include crude oil and natural gas under the Goods and Services Tax (GST) framework at a lower slab of 5%. The industry has been seeking this inclusion for a while now, with the aim of improving the ease of doing business and bringing down the costs associated with the production and distribution of petroleum products.
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 stakeholders, who believe that the inclusion of crude oil and natural gas under GST would help to streamline the tax structure and reduce the complexity associated with the current system.
Currently, petroleum products such as petrol, diesel, and liquefied petroleum gas (LPG) are outside the GST framework, and are instead taxed under the Central Excise Act and the Value Added Tax (VAT) by the state governments. This has led to a complex tax structure, with multiple taxes being levied on the production and distribution of these products. The inclusion of crude oil and natural gas under GST would help to simplify this structure, and bring down the costs associated with the production and distribution of petroleum products.
In addition to seeking the inclusion of crude oil and natural gas under GST, the industry may also seek compensation for the under-recoveries made on LPG sales, according to an ICRA executive. The under-recoveries on LPG sales have been a major concern for the industry, as the subsidy burden has been increasing over the years. The industry is hoping that the government will provide some relief on this front, by providing compensation for the under-recoveries made on LPG sales.
The inclusion of crude oil and natural gas under GST would also help to bring down the costs associated with the production and distribution of petroleum products. Currently, the tax structure is complex, with multiple taxes being levied on the production and distribution of these products. The inclusion of crude oil and natural gas under GST would help to simplify this structure, and bring down the costs associated with the production and distribution of petroleum products.
The oil and gas industry is a critical sector of the Indian economy, and any relief provided by the government would be welcome. The industry is hoping that the government will take into account the concerns of the industry, and provide some relief on the tax front. As the country gears up for the upcoming Budget 2026-27, the industry is keeping its fingers crossed that the government will include crude oil and natural gas under GST at a lower slab of 5%.
The benefits of including crude oil and natural gas under GST are numerous. For one, it would help to simplify the tax structure, and bring down the costs associated with the production and distribution of petroleum products. It would also help to increase the competitiveness of the Indian oil and gas industry, by bringing down the costs associated with the production and distribution of petroleum products.
In addition, the inclusion of crude oil and natural gas under GST would also help to increase the government’s revenue. Currently, the tax structure is complex, with multiple taxes being levied on the production and distribution of petroleum products. The inclusion of crude oil and natural gas under GST would help to simplify this structure, and increase the government’s revenue.
The industry is also hoping that the government will provide some relief on the subsidy front. The subsidy burden has been increasing over the years, and the industry is hoping that the government will provide some relief on this front. The government has been providing subsidies on LPG and kerosene, and the industry is hoping that the government will continue to provide these subsidies.
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 take into account the concerns of the industry, and provide some relief on the tax front. The inclusion of crude oil and natural gas under GST would help to simplify the tax structure, and bring down the costs associated with the production and distribution of petroleum products. It would also help to increase the competitiveness of the Indian oil and gas industry, and increase the government’s revenue.
As the country gears up for the upcoming Budget 2026-27, the industry is keeping its fingers crossed that the government will include crude oil and natural gas under GST at a lower slab of 5%. The benefits of including crude oil and natural gas under GST are numerous, and the industry is hoping that the government will take into account the concerns of the industry.
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