Excelsior Correspondent
JAMMU, Dec 28: The Federation of Automobile Dealers Associations (FADA), Jammu, has flagged serious concerns over the disproportionately high Value Added Tax (VAT) levied on Compressed Natural Gas (CNG) in Jammu and Kashmir, stating that the Union Territory has the highest VAT rate on the clean fuel compared to neighbouring States and Union Territories.
In a handout, FADA Jammu Chairperson Sanjay Aggarwal highlighted that CNG in Jammu and Kashmir attracts VAT at the rate of 21 per cent, significantly higher than rates prevailing in nearby regions such as Delhi, Punjab, Haryana, Uttar Pradesh, Himachal Pradesh and Rajasthan.
In contrast, Delhi has exempted CNG from VAT altogether, while Punjab levies 3 per cent, Haryana 5 per cent, Rajasthan 7.5 per cent, Uttar Pradesh 12.5 per cent and Himachal Pradesh 13.7 per cent.
As a result of the high tax burden, the retail price of CNG in Jammu and Kashmir has reached around Rs 98 per kg, compared to Rs 77 in Delhi, Rs 87.58 in Punjab, Rs 86.30 in Haryana, Rs 94 in Uttar Pradesh, Rs 90.48 in Himachal Pradesh and Rs 91.90 in Rajasthan.
FADA has cautioned that the steep VAT on CNG is discouraging the adoption of this cleaner, more economical and environmentally friendly fuel, forcing consumers and commercial operators to continue relying on petrol and diesel, which contribute more significantly to air pollution.
The Federation pointed out that high CNG prices undermine Government efforts to promote cleaner fuels and reduce vehicular emissions. The Federation stated that elevated CNG costs are increasing operational expenses for commercial vehicle operators, public transport providers and logistics businesses, ultimately impacting service affordability and efficiency.
FADA noted that sectors such as tourism, horticulture and small-scale industries-key pillars of the J&K economy-depend heavily on commercial transportation, which continues to rely largely on petrol and diesel due to the high cost of CNG.
According to the FADA, commercial fleet operators in Jammu and Kashmir are keen to shift to CNG owing to its lower running costs, better mileage and environmental benefits. However, the high VAT structure in the UT has made CNG operations financially unviable when compared to neighbouring States, negating the economic advantage usually associated with the fuel.
The Federation has requested the Government of Jammu and Kashmir to reconsider and rationalise the VAT on CNG in line with rates prevailing in neighbouring States and Union Territories as such a more would not only promote environmental conservation but also provide economic relief to consumers and businesses.
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