Mr. Vivekanand, Director (Finance, Taxation & Legal), FIPI began the session with the opening remarks. He said that India's economy is growing at a robust rate of 7.8% for the first quarter of the fiscal year 2025-26, the fastest in five quarters. This surge, driven by the strong performance of the services, manufacturing, and construction sectors, positions India as the fastest-growing large economy globally.  He then mentioned that the government is focused on realizing the goal of "Viksit Bharat 2047" through various reforms, including recent next-generation GST changes.   He highlighted that over eight years, GST has steadily evolved through rate rationalization and digitalization, becoming the backbone of India’s indirect tax framework. In a landmark achievement, India's GST returns reached a record high of ₹2.37 lakh crore in April 2025, making the highest monthly collection ever. Further, on the energy front, he welcomed the restructuring of taxes on solar, wind, biogas components and electrolyzers to promote renewable energy, by reducing GST to 5 per cent, but noted that petroleum industry expectation of bringing 5 items in GST is yet to be met.

Setting the context for the session, Ms. Neetu Vinayek, Partner EY, gave a broad overview about a robust Indian economic scenario. She mentioned that with strong GDP growth at 7.8 % in Q1 2025-26, manufacturing PMI soaring at 59.1, current account deficit under control with forex reserves near record high, and growth in direct tax collection by 13.57%, India is poised to become the second largest economy by 2038. She then highlighted the main aspects related to the next gen GST reforms- mainly rationalization of 4-slab structure to 2-slab structure, removal of PoS of intermediary services, operationalizing GSTAT, relaxation of post sales discount requirements, and automated registration for low-risk applicants. She said that these reforms will lead to increase in consumption levels, ensure simplification in terms of fewer rates and lower incidence of inverted duty structure and will also provide long term signaling for making business and investment decisions.  

Ms. Uma Iyer, Partner EY talked about the GST rate changes on goods for oil and gas/petroleum operations from 12% to 18%; and a hike from 12% to 18% on professional, technical, and business services for petroleum exploration. Further, she mentioned that as part of broader GST reforms approved by the Council, the GST rate on coal increased from 5% (plus compensation cess) to 18%. She also said that IGST on imports for oil & gas operations is expected to increase from 12% to 18%. She also mentioned that a letter that was needed from the Operator for BCD exemption in case of import of goods, remains in place irrespective of the GST rate being increased from 12% to 18%.

She then talked about the proposed GST rate changes on the procurement side such as air transport of passengers in other than economy class -up from 12% to 18%; Solar water heater and system, majority of renewable energy devices and parts for their manufacture, fuel cell motor vehicles- reduced from 12% to 5%; Multimodal transport of goods within India- to change from 12% to 5% (where no leg of transport is through air, with restricted ITC) or 18% with ITC; etc.  She said rate reduction in case of renewable energy is a welcome step that shows clear motive of the government to accelerate India's trajectory towards clean energy transition.

She then highlighted that the GST Council recommended to change the place of supply for intermediary services from the supplier's location to the recipient's location, a move that would benefit services as exports. This is likely to improve the competitiveness of Indian service providers and mitigate litigation around export status. She also spoke about clarifications to be issued by CBIC relating to credit notes (including non-reversal of ITC due to issuance of financial / commercial credit note)

She welcomed the operationalization of GST Appellate Tribunal (GSTAT) for accepting appeals before end of Sept’25 and commence hearing before end of Dec’25. Principal bench of GSTAT will also serve as National Appellate Authority for Advance Ruling. She said that the operationalization of GSTAT would help address litigation timelines and resolution of pending disputes.

She also shed light on the sunset clause for BCD exemption benefit on imports for petroleum operations available till 31 March 2026 only, unless amended / extended.

She concluded by mentioning that organizations need to take key considerations while inventory & transition planning which includes- IT readiness, revisiting existing contracts as well as prior period supplies which covers price variations/ returns & Job-work.

Ms. Uma Iyer from EY, then conducted the Q&A session and provided her views and opinions on various queries posted by participants.

Lastly, FIPI complimented the EY team for an elaborative presentation on the topic covering GST impact on oil and gas sector. FIPI also thanked the participants from the energy industry for their active and interactive participation during the event.