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Modi govt reduces GST on bunker fuel; sets tax for offshore oil, gas sales

India's GST Council decided to reduce the tax on the bunker fuel sales after an Oct. 6 meeting

Reuters  |  NEW DELHI 

GST. Illustration: Ajay Mohanty

has reduced the goods and service (GST) on oil, known as bunker fuel, to 5 percent for all vessels, the said on Wednesday, which should help the country's fuel sellers compete with other lower-ports in Asia.

India's nationwide taxed sales at 18 percent when it was implemented on July 1. The replaced state value-added taxes that were typically between zero and 5 percent.

India's Council decided to reduce the on the sales after an Oct. 6 meeting where it recommended assessing rates for the sales, natural gas transportation and for offshore oil and gas field services, according to the statement the Council posted on Twitter.

"This would provide limited relief to the sellers that had seen their market shifting to Colombo," a trade source said. Like Asian bunkering hubs in Singapore and Fujairah, Sri Lanka levies no taxes on oil.

For the offshore oil and gas field services, the Council set the at 12 percent. Natural gas transported through a pipeline will have a of 5 percent without so-called input credits, or 12 percent if the credits are included, according to the statement.

First Published: Wed, October 11 2017. 15:52 IST