GST on gas: Analyst explains benefits for user industries, lists top picks
Once gas is brought under Goods and Services Tax (GST), industry users of gas will see some benefits, says Probal Sen, Energy Analyst at ICICI Securities.
However, including aviation turbine fuel (ATF) under GST will not impact oil marketing companies (OMCs).
Sen highlighted that under the current system, industrial consumers of gas cannot avail of input tax credit (ITC) because gas is not included under GST. Once gas is included, it would make the entire supply chain more efficient and cost-effective for both suppliers and consumers.
For Gail, this increased demand could mean better use of their new pipelines in the east and northeast, as well as their existing ones.
Currently, Gail’s pipeline usage is around 50%, and might only increase to about 60% in the next three years with moderate growth. Any extra improvement would be beneficial.
