Leh/Jammu, Aug 27 (PTI): Ladakh Lieutenant Governor Vinai Kumar Saxena has approved a significant reduction in VAT on natural gas, including Compressed Natural Gas (CNG) and Piped Natural Gas (PNG), from 21 per cent to 5 per cent, a move aimed at promoting affordable clean energy and accelerating the City Gas Distribution (CGD) network in the Union Territory.

The decision is expected to make CNG and PNG more affordable for consumers, encourage adoption of cleaner fuels and facilitate the administration's plan to provide piped household gas connections across Ladakh.

The move follows a June 22 communication from the Petroleum and Natural Gas Regulatory Board (PNGRB), under the Ministry of Petroleum and Natural Gas, seeking a concessional fiscal framework for natural gas in Ladakh to make the CGD system more viable and affordable.

The PNGRB cited Ladakh's difficult terrain, dispersed population centres, extreme climatic conditions and high cost of transporting energy over long distances as factors that could adversely affect the economics of CGD development in the Union Territory compared with other parts of the country.

Saxena subsequently approved the proposal to reduce VAT from 21 per cent to 5 per cent, bringing Ladakh at par with states such as Gujarat, Karnataka and Andhra Pradesh, which levy 5 per cent VAT on natural gas.

Natural gas remains outside the GST framework and is subject to VAT imposed by the respective states and Union Territories.

"Our objective is to make essential energy more affordable to the people of Ladakh while creating an enabling environment for investment and infrastructure development," Saxena said.

"The reduction of VAT on natural gas will support the expansion of PNG and CNG services, strengthen the clean-energy ecosystem and improve the quality of life of our people," he added.

The PNGRB has authorised Bharat Petroleum Corporation Limited (BPCL) to develop the CGD infrastructure in Ladakh. It had also recommended bringing PNG and CNG under a concessional VAT framework of 5 per cent or lower, noting that affordability would be critical for consumer adoption and demand creation during the initial years of CGD development.

The decision is part of the administration's efforts to promote clean energy and sustainable development in the Union Territory.

Earlier, the Ladakh Administration had reduced VAT on Aviation Turbine Fuel (ATF) for civilian aircraft from 26.25 per cent to 1 per cent, aimed at making air travel to Ladakh more competitive and positioning the Union Territory as a refuelling hub.

The measure was taken in the context of the national policy push for promoting regional air connectivity under the UDAN scheme. PTI AB AB NB NB

(This story is published as part of the auto-generated syndicate wire feed. No editing has been done in the headline or the body by ABP Live.)