petrol-diesel
The central government took important steps to protect the general public from the rise in crude oil prices due to the Middle East crisis. Even the central excise duty was reduced by Rs 10 per liter, but due to the fire in crude oil prices and increasing losses of oil marketing companies, the prices had to be increased. During this time, the state governments remained silent spectators despite the voices raised by the opposition regarding bringing petrol and diesel under the ambit of GST. According to sources, the Central Government will discuss this issue in the upcoming GST Council meeting, while the State Governments should take initiative on this. In fact, the Center has made a huge cut in the revenue coming to its side from this item and now it is the turn of the states in which the Center does not want to put any interference or pressure.
If sources are to be believed, the Center believes that if the state governments consider it appropriate to reduce their revenue i.e. VAT and cess to provide relief to the general public, then they will take steps. Sources say that if the issue of bringing petrol and diesel under the ambit of GST is raised by any state government in the GST Council meeting to be held from the end of July to mid-August, then there will definitely be a discussion. However, to pass the proposal, it is necessary to get the support of more than 20 states and the Centre. In the current tax system, since there is no GST on petrol and diesel, the central and state governments collect separate taxes on them under the old system.
- Central Excise- Uniform excise duty is imposed throughout the country by the central government. In this the government had reduced the price by Rs 10 per litre.
- VAT- Every state government collects VAT and cess at different rates as per its convenience. For this reason, the prices of petrol and diesel are different in different states and cities.
- Total tax burden- A large part of the retail price of fuel goes only in the form of government tax and dealer commission.
What will happen if it is brought under the ambit of GST?
According to experts and economic calculations, if petrol and diesel are brought under the ambit of GST, the prices will come down and the common man will directly benefit. Huge fall in prices- Even if the fuel is kept in the highest GST slab of 28 percent, its current prices may fall by ₹ 15 to ₹ 20 per liter. Uniform price across the country – After the implementation of GST, fuel prices will become almost the same across India. Benefits to businesses – Companies and logistics sector will be able to claim input tax credit on fuel expenditure, which will make freight transportation cheaper and reduce overall inflation.
What are the obstacles in implementing GST?
A large part of the income of the central and state governments comes from taxes on petrol and diesel. Including it in GST may cause huge financial loss to the states annually. Consensus of GST Council – According to the Central Government, to bring petrol and diesel under the ambit of GST, the states themselves will have to take initiative and it is necessary to have a consensus of all the states in the council meeting.
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