Guwahati, July 19: Assam government has announced a substantial reduction in the Value Added Tax (VAT) on Compressed Natural Gas (CNG) from 14.5% to 5%, effective until March 31, 2027 to promote environmental sustainability and combat air pollution.
The decision was made during a weekly state cabinet meeting led by Chief Minister Himanta Biswa Sarma, signaling a commitment to clean energy adoption.
“This will rationalize prices for consumers and augment its wider adoption,” the state government declared, underscoring the long-term vision behind the tax cut.
Union Petroleum Minister Hardeep Singh Puri took to X (formerly Twitter) to applaud the move, framing it as a step forward in realizing Prime Minister Narendra Modi’s vision of a gas-based economy. “Contrast this with steps being taken by opposition states to increase state taxes on fuels!” Puri remarked, highlighting the progressive nature of Assam’s policy.
Assam’s journey towards a CNG-driven future began in August 2019, when then Chief Minister Sarbananda Sonowal inaugurated the first CNG station in Dibrugarh. The momentum continued with the inauguration of Guwahati’s first CNG station by Chief Minister Himanta Biswa Sarma on January 2, 2023. Currently, Purba Bharati Gas Pvt Ltd (PBGPL), a joint venture of Assam Gas Company Limited, Oil India Limited, and GAIL Gas Limited, operates two CNG stations in Guwahati with two more on the way. The company also runs four stations in Dibrugarh, Kaziranga, and Duliajan.
The Petroleum & Natural Gas Regulation Board has authorized PBGPL to establish a comprehensive City Gas & CNG Network across various districts of Assam, including Kamrup, Kamrup Metropolitan, Cachar, Hailakandi, and Karimganj. PBGPL’s ambitious plans include the establishment of 15 CNG stations across the state, with 13 expected to be operational soon. Assam Gas Company Ltd also contributes to this green revolution by operating four CNG stations within the state.
Expets say the tax reduction is poised to make CNG a more attractive option for both commercial and private vehicle owners, as well as for domestic households and industrial establishments, further embedding clean energy in the state’s socio-economic fabric.
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