New Delhi: Amid record-high fuel prices, Finance Minister Nirmala Sitharaman said Monday there is no proposal as of now to bring crude oil, petrol, diesel, jet fuel (ATF) and natural gas under the Goods and Services Tax (GST).
When the GST was introduced July 1, 2017, amalgamating over a dozen central and state levies, five commodities – crude oil, natural gas, petrol, diesel, and aviation turbine fuel (ATF) – were kept out of its purview given the revenue dependence of the central and state governments on this sector.
This meant that the central government continued to levy excise duty on them while state governments charged VAT. These taxes, with excise duty, in particular, have been raised periodically.
While the taxes haven’t come down, a spike in global oil prices on demand recovery has pushed petrol and diesel to an all-time high, leading to demand for them to come under the GST.
“At present, there is no proposal to bring crude petroleum, petrol, diesel, ATF and natural gas under GST,” Sitharaman said in a written reply to a question in the Lok Sabha. She said the law prescribes that the GST Council shall recommend the date on which the goods and services tax be levied on petroleum crude, high-speed diesel, motor spirit (commonly known as petrol), natural gas and ATF.
Also read: Govt can cut excise duty on petrol, diesel by Rs 8.5 a litre without hurting revenues: Analysts
“So far, the GST Council, in which the states are also represented, has not made any recommendation for inclusion of these goods under GST,” informed Sitharaman.
“The Council may consider the issue of inclusion of these five petroleum products at a time it considers appropriate keeping in view all the relevant factors, including revenue implication,” added the finance minister.
Sitharaman has in recent weeks talked of inclusion of fuel under GST as well as centre and states taking a joint call on cutting taxes to cushion consumers against the spike in retail prices.
To a separate question, her junior in the Finance Ministry, Anurag Singh Thakur said excise duty on petrol was Rs 19.98 per litre a year back and is Rs 32.9 now. Similarly, on diesel, the excise duty has been raised from Rs 15.83 to Rs 31.8.
“The excise duty rates have been calibrated to generate resources for infrastructure and other developmental items of expenditure keeping in view the present fiscal position,” Thakur said.
