Why my compressed .gz file is not being ingested by local file source?

The Local File Source does not support the reading and sending of compressed files or files with the following extensions:

.gz, .tar, .bz2, .z, .zip, .jar, .war, .7z, .rar, .exe, .dll, .xz, or /var/log/(lastlog|btmp|wtmp) binary files

 
However, you can ingest .gz files via an AWS S3 Source or HTTP Source

AWS S3 Source:

An S3 Source can collect either plain text or gzip-compressed text. Data is treated as plain text by default, but gzip decompression will be used if both of the following conditions apply:

1. The target file has a .gz or .gzip extension, or no file extension.
2. The target file's initial bytes match the gzip file format.

HTTP Source

You can send Sumo plain, uncompressed data (such as plain text) or you can send data that has been compressed by either the "deflate" or the "gzip" method. Compressed data can only be sent with the POST method. You can compress log data or metric data prior to upload.

To send a compressed payload, specify a value of gzip (for gzip-compressed) or deflate (for zlib-compressed) in the Content-Encoding header of your request, and include the compressed data as the request body.

Note: Compressed files ingested via an AWS S3 Source or HTTPS Source are decompressed before they are ingested, so they are ingested at the decompressed file size rate.