Oil & Gas exploration tax set to be increased to 18%

The GST Council has recommended raising the rate on goods and services used in oil and gas exploration, production, and pipeline transport from 12% to 18%, a move that will raise costs for companies and squeeze margins.

The higher tax will hit all oil and gas companies, with explorers like ONGC, Oil India, Vedanta, and Reliance Industries most affected.

The proposed slab will apply to all exploration and production (E&P) contracts nationwide. Oil and gas explorers rely on a wide range of costly goods and support services for drilling and production.