Assam cuts VAT on Piped Natural Gas to 5% to boost clean energy use

Guwahati, July 10: The Assam government has proposed a steep reduction in Value Added Tax (VAT) on Piped Natural Gas (PNG) from 14.5% to 5%, a move aimed at making cleaner fuel more affordable for households while accelerating the expansion of the city’s gas distribution network.

Announcing the measure in the 2026-27 Budget on Friday, Finance Minister Jayanta Mallabaruah said the tax cut is intended to reduce household energy costs, promote cleaner fuel and support the expansion of city gas infrastructure across the state.

The decision is expected to benefit domestic consumers as well as businesses connected to PNG networks, while encouraging more people to shift away from conventional fossil fuels such as LPG and firewood.

The VAT reduction complements the government’s wider clean energy roadmap unveiled in the Budget. Assam is expanding piped natural gas networks in Guwahati, Dibrugarh, Jorhat, Tezpur, Darrang, Baksa, Kokrajhar, Nagaon and the Barak Valley.

According to the Budget, the state has already provided more than 13,500 domestic PNG connections and established 46 CNG stations, with the government stating that the expansion will bring cleaner fuel to homes, businesses and vehicles while supporting a greener Assam.

The tax relief comes alongside several other green initiatives announced in the Budget, including a proposed Green Cess on polluting industries and incentives for electric vehicles and renewable energy, underscoring the government’s push to promote cleaner energy and reduce carbon emissions.

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