Petrol and diesel are presently taxed under VAT rather than Goods and Services Tax, but Finance Minister Nirmala Sitharaman has focused on that the GST law already contains provisions for their inclusion. She highlighted that for this transition to take place, states must unify and reach a consensus in the GST Council.
GST Implementation on Petroleum Products Dependent on GST Council Decision: Sitharaman
Sitharaman inform on NDTV Profit in an exclusive interview, “If they fix the rate and they all come together and decide that GST will include petroleum products, then we can implement it right now.”
She also said that the provisions important to include petroleum products under GST have already been made and it is up to the GST Council to discuss and make the conclusion.
Currently, the price of petrol differs from state to state depending on the local incidence of taxation. Still, the states are not prepared to include petroleum products under GST as it could lead to revenue losses for the states.
Bringing Petrol and Diesel Under GST: A Potential Solution to High Fuel Prices and Taxation
GST is being observed as a solution for the issue of high price of petrol and diesel in the country, as it would end the cascading effect of tax on tax (state VAT being imposed, not just on the price of production but also on the excise duty imposed by the centre on such output).
Petroleum products are taxed at close to 60%, with the state obtaining Rs 2.5 lakh crore and the Centre making Rs 2 lakh crore. By bringing petrol and diesel under GST, the government will bring a 28% tax slab over these products, as that is the highest slab in the tax rule, according to Prime Minister Narendra Modi.
Sitharaman also touched on subject of the growth of cities over major metros, financial regulation, especially concerning derivatives and the Income Tax Regime Committee.
