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Ladakh slashes VAT on Natural Gas to 5% in major clean energy push

August 27, 2026

Srinagar, Aug 27: In a landmark decision aimed at accelerating the transition to clean energy and easing costs for residents, the Union Territory Administration of Ladakh has drastically reduced the Value Added Tax (VAT) on Natural Gas—covering both Compressed Natural Gas (CNG) and Piped Natural Gas (PNG)—from 21% to just 5%.

The policy shift, approved by Lieutenant Governor Ladakh V.K. Saxena following recommendations from the Petroleum and Natural Gas Regulatory Board (PNGRB), marks a pivotal step toward building a sustainable, carbon-neutral ecosystem in the high-altitude region.

The PNGRB had previously advised bringing PNG and CNG under a concessional VAT framework of 5% or lower, stressing that initial price affordability is critical to driving adoption among households and local businesses in remote areas.

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. These measures reflect the UT Administration’s commitment to building a more connected, competitive, clean, and sustainable Ladakh,” stated L-G V.K. Saxena while announcing the approval.

“Glad to share that the UT of Ladakh has significantly reduced VAT on Natural Gas (CNG & PNG) from 21% to just 5%, a major step towards promoting affordable clean energy and improving the ease of living for the people of Ladakh. This will majorly boost the Centre’s larger plan of rolling out the City Gas Distribution (CGD) network to provide affordable piped household gas across Ladakh. This would also offset the high energy transportation costs caused by the difficult terrains and extreme climate in the UT, besides encouraging consumers for wider adoption of cleaner fuels” Saxena said. “

This brings Ladakh at par with states like Gujarat, Andhra Pradesh and Karnataka, advancing Hon’ble PM Shri @narendramodi Ji’s broader vision for a sustainable and carbon-neutral future” he added.

The UT Administration remains fully committed to building a connected, competitive, clean, and sustainable Ladakh, ensuring essential energy is affordable and accessible for all.

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