Archive · 29 Sep 2025
FICCI Urges Reconsideration of GST Hike on Oil Sector Goods
Imagine companies that dig for oil and gas signed agreements with the government promising no extra taxes on their equipment.
Now, the government has increased a tax called GST on the equipment they use.
This tax went up from 12% to 18%.
An industry group called FICCI is worried this will break the agreements, increase costs, and discourage companies from investing in finding more oil and gas.
They want the government to reconsider the tax hike, allowing operators to continue with the original terms of their contracts to maintain energy security.
FICCI sent a letter to the Oil Minister regarding increased GST on capital goods.
The GST on capital goods used in petroleum and CBM sectors rose to 18%.
FICCI believes the increase contradicts existing E&P contracts.
The industry body is concerned about the impact on investments and domestic production.
FICCI requested the government to reconsider the GST hike.
- Who
- FICCI
- What
- Requesting reconsideration of the GST hike on capital goods for petroleum and CBM operations.
- When
- September 25, 2025 (Letter to the Minister)
- Where
- India
- Why
- To reduce the burden on domestic E&P operators and ensure energy security.
Oil & Gas Industry
Government
GST on Capital Goods
Oil & Gas Industry
Additional GST increases project costs and disrupts existing contracts.
Government
The article does not provide a clear government stance; however, the government increased the GST.
- Affected Sectors
- Petroleum, Natural Gas, and Coal Bed Methane (CBM)
- GST Increase
- From 12% to 18%
- Focus of Concern
- Capital Goods
- Industry Action
- Sent letter to Oil Minister
- Primary Reason for Concern
- Disrupts existing E&P contracts
- Government Promise
- Stable contractual and fiscal terms
