In the 22nd GST Council meeting, few important recommendations were offered for different industries which also included petroleum and oil sector. The proposal was to map a Goods and Services Tax (GST) structure, wherein petrol and oil will be inclusive of GST which are as under:
- Works contract services away from the shore and associated services relating to oil and gas exploration and production in the offshore areas beyond 12 nautical miles shall attract GST of 12%
- GST without Input tax credit (ITC) on transportation of natural gas through pipeline will be of 5%. In case of GST with full ITC will be of 12%.
- Import of rigs and ancillary goods under lease will be excluded from Integrated GST (IGST), subject to payment of appropriate IGST on the supply/import of such lease service and fulfilment of other specified conditions.
There is no notification for the recommendation as such, but it will be issued shortly.
For now, the government has reduced the GST rate on bunker fuel for both foreign going and coastal vessels which is now 5%.
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