(file photo) Ladakh Lieutenant Governor Vinai Kumar Saxena 

The Union Territory of Ladakh on Thursday announced to reduce value-added tax (VAT) on CNG) and PNG to 5 per cent from 21 per cent , a move aimed at lowering the cost of cleaner fuels and supporting the rollout of a city gas distribution network in the region.

Ladakh Lieutenant Governor Vinai Kumar Saxena announced the reduction in a post on X, saying the move would promote affordable clean energy and improve access to cleaner fuels for consumers in the Union Territory.

The 16-percentage-point reduction comes as Ladakh works towards expanding its gas distribution infrastructure, including plans to develop a City Gas Distribution (CGD) network that would eventually provide piped natural gas to households.

The administration said the lower tax rate could help offset some of the higher costs associated with transporting energy to Ladakh, where difficult terrain, long distances and extreme weather conditions add to logistics expenses.

“The reduction will offset the high energy transportation costs caused by the difficult terrain and extreme climate in the UT,” Gupta said.

The lower tax is also expected to encourage wider adoption of CNG and PNG as alternatives to conventional fuels, potentially helping reduce emissions and supporting Ladakh’s broader sustainability goals.

The move brings Ladakh’s VAT rate on natural gas in line with that of States including Gujarat, Andhra Pradesh and Karnataka, according to the Lieutenant Governor.

The administration sees the tax reduction as part of its wider effort to make essential energy more affordable while building cleaner and more reliable energy infrastructure.

The proposed CGD network could eventually provide households with a more convenient supply of piped gas, reducing dependence on conventional fuels that have to be transported over long distances to the high-altitude region.

For Ladakh, where the cost of transporting fuel and other essential commodities is significantly affected by its geography, cheaper natural gas could also provide some relief to households and businesses.

Kumar said the initiative was aligned with the Centre’s broader push towards cleaner energy and a more sustainable economy.

The tax cut comes as Ladakh seeks to balance its growing energy requirements with its environmental objectives, with the UT positioning cleaner fuels and improved energy infrastructure as key components of its long-term development strategy.

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