Buckling to the relentless pressure from many of the private power project developers, the Andhra Pradesh government has reportedly issued orders for withdrawing the current rate of Value Added Tax(VAT) on re-gassified Liquefied natural gas or RLNG.
Gas Authority of India Ltd
The gas is currently being supplied to private promoters by companies like Gas Authority of India Ltd (GAIL) and Gujarat State Petroleum Corporation Limited while the AP commercial taxes department has issued GO No. 181 and 182 earlier this week for exempting VAT on RLNG as well as bio-gas for two years.
TDP government says that it is now providing
The exemptions are estimated to result in a staggering loss of revenues worth Rs 2,300 crore revenue to the AP exchequer for a two-year period. The TDP government says that it is now providing this exemption for joining the gas pooling system which has been launched by the Centre for availing the RLNG supply by means of e-bidding.
Chandrababu Naidu to agree for the VAT exemptions
This decision comes after the commercial taxes department earlier warned that the proposed VAT exemption on gas would result in losses of Rs 1,100 crore per annum for the state and also cautioned how such a move would only benefit the private power companies. But energy department officials were reportedly able to convince chief minister Chandrababu Naidu to agree for the VAT exemptions as stranded power units can be resuming operations by availing RLNG that would be supplied by GAIL and GSPCL.
