MP Industries Seek PNG VAT Cut Amid West Asia Crisis

Indore, May 13 (PTI) Micro, small and medium enterprises (MSMEs) in Madhya Pradesh on Wednesday demanded a reduction in the 14 per cent value added tax (VAT) levied on piped natural gas (PNG) for industrial use in the state.

Industry organisations say that fuel prices due to the West Asia crisis have increased production costs for MSMEs, and the high VAT on PNG is putting them at a competitive disadvantage compared to enterprises in neighbouring states.

During the meeting of the Goods and Services Tax (GST) Grievance Redressal Committee held in Indore, the MSME organisation, the Association of Industries Madhya Pradesh, raised the issue of high VAT on PNG for industrial use.

Association President Yogesh Mehta told PTI after the meeting, "Fuel prices have already increased significantly due to the West Asia crisis. The 14 per cent VAT on PNG for industrial use in Madhya Pradesh is placing a significant burden on the production costs of MSMEs. Due to the high VAT, Madhya Pradesh's MSMEs are lagging behind enterprises in neighbouring states in their competitiveness."


He added that the VAT rate on PNG for industrial use in neighbouring states ranges from three to five per cent.

Mehta said that since PNG is currently not subject to GST, industries are not receiving the benefit of input tax credit on its purchase.

"In view of the current crisis in West Asia, to provide relief to MSMEs, either the VAT on PNG should be reduced or it should be brought under the GST ambit," he said.

Representatives from the industry and business community, along with tax officials from the central and state governments, attended the meeting of the GST Grievance Redressal Committee.

The industry and business communities also demanded simplification of the GST return filing process.