Invalidate Notification on Input Tax Credit Withdrawal on Gas in Gujarat, urges Assocham
Gujarat, India: Assocham has urged the centre government to proximately get withdrawn the notification vis-a-vis withdrawal of input tax credit on inter-state sale/branch transfer of natural gas issued by Finance Department of Gujarat government.

"Consequent to this announcement, cost of re-gasified liquefied natural gas (RLNG) supplied by Petronet LNG to other PSU gas distributors like Gail India Limited, Indian Oil Corporation Limited (IOCL) has shot up from four per cent to 15 per cent,” underlined Assocham in a communication addressed to Union Minister for Commerce and Industry, Nirmala Sitharaman and Finance Minister of Gujarat, Nitin Patel.

The letter added, “These PSUs have passed on the upsurge in tax to industry outside Gujarat, thus making RLNG costlier by 11 per cent with opposing impact oscillating from 2.50 to 3 per standard cubic meter (scm)."

Considering that many industries are stuck with long-term supply agreements with PSU distributors of exorbitant RLNG and, therefore, cannot switch over to economical alternate source of energy due to ‘take or pay' clause in supposed agreements.

"This notification has thus made matters worse by making RLNG further dearer hitting industries outside Gujarat very hard. At a time when trade and industry are moving towards execution of goods and services tax (GST), this withdrawal of input tax credit is unfair for industries outside Gujarat as it is making them highly uncompetitive," emphasized the Assocham letter .