The Chandigarh Administration has cut VAT on natural gas from 12.5% to 5%, aiming to make cleaner fuel more affordable and support the expansion of gas infrastructure amid India’s push for alternative energy sources.
The Chandigarh Administration has cut value added tax on natural gas from 12.5% to 5%, a move it says will ease costs for users of compressed natural gas and piped natural gas in the Union Territory. The lower rate took effect from midnight on September 18, according to the administration, and is intended to make cleaner fuel more affordable while also supporting the expansion of gas infrastructure in the city.
The tax change comes as city authorities and the central government continue to promote gas-based transport and household energy as part of a wider shift towards cleaner fuels. According to local reports, the administration has said the lower levy should encourage wider use of natural gas and help improve availability across Chandigarh, where demand for CNG and PNG has been rising alongside infrastructure growth.
The announcement also lands against the backdrop of a separate debate over compressed biogas, or CBG, under the GOBARdhan scheme. The Ministry of Petroleum and Natural Gas has said a revised administered price of Rs 2,110 per million British thermal units is a procurement rate paid to producers, not the retail price charged to CNG drivers or household PNG users. The ministry rejected newspaper claims that the change would impose a large burden on consumers, saying the higher procurement cost is softened by affordability support and spread across a much larger domestic gas pool.
The broader policy push reflects New Delhi’s effort to scale up alternative fuels made from agricultural residue, cattle dung and other organic waste. Business Standard reported that the GOBARdhan scheme, approved by the Union Cabinet with a budget of Rs 23,731 crore, is meant to back plant development, financing and gas connectivity so that compressed biogas can become a more durable part of India’s energy mix.
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