In a significant policy push aimed at strengthening the State’s energy ecosystem and attracting private investment, the Meghalaya Cabinet on Wednesday slashed the Value Added Tax (VAT) on methane gas used as Compressed Natural Gas (CNG) from 14.5 per cent to 5 per cent, aligning the State with prevailing rates in other parts of the country.
Chief Minister Conrad K. Sangma said, “We have reduced our VAT rate on methane gas as Compressed Natural Gas CNG from 14.5 percent to 5 percent in line with what other states also are doing, and this is being done, of course, to create a competitive environment so that we will be able to attract different agencies to come and set up their base out here, we have decided, as I said to reduce the vat from 14.5 percent to 5 percent on Methane gas used as Compressed Natural Gas CNG.”
The Cabinet’s decision is expected to incentivise the entry of new players in the clean fuel segment while enhancing affordability and accessibility of CNG in the State. Officials indicated that the tax rationalisation is part of a broader strategy to position Meghalaya as a viable destination for energy infrastructure investments in the Northeast.
On the long-pending LPG bottling plant at Umiam in Ri-Bhoi district, being constructed by Indian Oil Corporation, the Chief Minister underscored that the project had gained momentum after years of delay. “It is something that was hanging for a long time and it was this government that took the decision provided a land and the construction started, obviously, everything takes time. We could not expect the construction to be over, but its going very fast, so we expect it to be soon completed soon. It should have been a long time back, but that’s okay. But, we took the decision, we provided the land and we are now almost at the point where we should be able to complete it,” he said.
The facility is expected to significantly reduce Meghalaya’s dependence on external LPG supplies and streamline distribution once operational.
Addressing concerns over the current supply scenario, the Chief Minister said domestic LPG availability in the State remains largely manageable despite minor disruptions, while shortages persist in the commercial segment across the country. “As far as Meghalaya is concerned, there is for the domestic use, we are still managing, there is some shortage but not that much. But when it comes to commercial LPG cylinders, there is a shortage throughout the nation. So government has increased the amount to 70 percent of the original amount which was there for all the states earlier, it was at 20 percent and then now they’ve increased to 70 percent but actual impact of that is yet to be felt. We do expect that in the coming days that the actual Supply will go up and we do expect some relief.”
Highlighting logistical constraints, he added, “But of course, these are bit of a challenge because as you’re aware almost 90 percent of the LPG requirements is there it comes from this region and passes to the state of Hummus and therefore the challenges are there. But at the same time, as I said, the government of India is making arrangements and different levels to minimise the inconvenience that the people are facing.”
