Seeks to amend Notification No. 3/2017- Central Tax (Rate) dated 28.06.2017.
Ministry of Finance has notified an increase in GST rates applicable to petroleum exploration and coal bed methane (CBM) sector equipment. Vide Notification No. 11/2025-Central Tax (Rate) dated 17 September 2025, the Central Government amended Notification No. 3/2017-Central Tax (Rate) to revise the concessional rate earlier applicable.
With effect from 22 September 2025, the rate on specified goods supplied for use in petroleum operations and CBM projects will stand at 18% (9% Central GST + 9% State GST) instead of the earlier effective rate of 12% (6% + 6%). These goods include a wide range of exploration and production equipment such as drilling rigs, seismic survey tools, marine vessels, oilfield chemicals, production platforms and related machinery, supplied to public sector undertakings, contractors, and subcontractors engaged in petroleum and CBM projects.
The concessional regime introduced in 2017 aimed at reducing project costs in the petroleum and natural gas sector. The present upward revision reflects a change in policy approach towards rationalisation of tax rates, aligning petroleum-related supplies with the general 18% GST slab.
The notification maintains the compliance framework requiring certification by the Directorate General of Hydrocarbons and adherence to prescribed conditions for eligibility. Stakeholders in the sector will now need to factor in the higher tax burden on procurement of essential exploration and production equipment from 22 September 2025 onwards.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
Notification No. 11/2025- Central Tax (Rate) | Dated: 17th September, 2025
G.S.R. 647(E).- In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 3/2017-Central Tax (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Subsection (i), vide number G.S.R. 675(E), dated the 28th June, 2017, namely:-
In the said notification, in the TABLE, against S. No. 1, for the entry under column (4), the entry “9%” shall be substituted.
2. This notification shall come into force on the 22nd day of September, 2025.
[F. No. CBIC-190341/188/2025-TRU]
Dheeraj Sharma
Under Secretary to Government of India
Note: – The principal notification No.3/2017-Central Tax (Rate), dated the 28th day of June, 2017 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 675(E), dated the 28th day of June, 2017 and last amended by notification No. 08/2022-Central Tax (Rate), dated the 13th July, 2022 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 556(E), dated the 13th July, 2022.
