Vijayawada, Dec 30 (KNN) Andhra Pradesh Chambers of Commerce and Industry Federation (AP Chambers), with its affiliated associations, expressed that the elevated costs of Natural Gas (NG), in comparison with other traditional fuels, pose a hindrance to their transition to Compressed Natural Gas (CNG) and Piped Natural Gas (PNG).

These affiliated associations pertain to Micro, Small, and Medium Enterprises (MSMEs), hospitality, manufacturing, construction, tourism, foundries, and transport sectors, reported Hans India.

In a formal letter to N Yuvraj, Secretary of Industry and Commerce for the State government, the AP Chamber highlighted the significant impact of the 24.5 per cent Value-Added Tax (VAT) on Compressed Natural Gas (CNG) in the state.

The tax rate, applicable to both commercial and industrial use, is the highest among states.

Drawing a comparison with Gujarat, where the VAT on natural gas is 5 per cent, the Chamber highlighted the growth Gujarat has shown in its consumption which further contributed to its industrial growth. 

This taxation, they argue, hinders industries, commerce, and transport from transitioning to the eco-friendly fuel alternative. 

The Chamber suggested that lowering the tax on natural gas would alleviate financial strain and facilitate a transition to a cleaner and more sustainable energy source.

Public Sector Undertakings (PSUs) such as IOCL, along with organisations like Bhagyanagar Gas Limited, are actively involved in developing infrastructure for the City Gas Distribution project in the State. 

This initiative aims to promote the use of an environmentally friendly fuel alternative across various segments.

The letter emphasised that lowering taxes on natural gas could also act as a catalyst in encouraging industries, businesses, and transportation sectors to adopt natural gas as their main energy source.

As per the chamber, reducing taxes would also align with the government’s goal of increasing natural gas usage from 6 percent to 15 percent by 2030, simultaneously reducing carbon emissions and achieving net-zero targets.

In light of these considerations, the AP Chamber has appealed to the State government to review the matter and consider lowering the VAT rates to 5 per cent, thereby ensuring equal competitive standing for industries in Andhra Pradesh.

(KNN Bureau)