Fuel inclusion under GST not on agenda for June 22 Council meet: Official

By: Admin
June 20, 2024
Categories: GST Recent News
4 Min Read

The GST Council meeting on June 22 is unlikely to discuss the inclusion of petroleum products under the Goods and Services Tax (GST), a government official said. Oil Minister Hardeep Singh Puri recently said that the government will work towards bringing petrol, diesel and aviation turbine fuel (ATF) under GST, sparking speculations that the issue will be discussed in the upcoming Council meeting.

“Inclusion of fuel under GST is not on the Council’s agenda. All the states have to agree for the inclusion. It’s an uphill task. At the moment there is no proposal that was discussed by the GST’s fitment committee,” the official told Moneycontrol.

There have been repeated calls to bring fuel under GST’s scope to create uniform pricing of key energy commodities, but several states have opposed the move earlier, citing the potential risk of losing the hefty revenue they derive from the fuel tax. It is expected that if petrol is included in the ambit of GST, where the highest tax slab is 28 percent, there may be considerable reduction in prices.

Petroleum products are currently subject to central excise duty and state-level value-added tax (VAT). This dual taxation not only swells the retail price of diesel and petrol but also makes them vary across states.

India has market-linked prices of petrol and diesel, allowing fuel retailers to fix prices in line with global crude cost, exchange rate, tax structure, inland freight and other related elements.

According to the Article 279 A (5) of the Constitution, the GST Council needs to recommend the date on which the indirect tax should be levied on petroleum and petroleum products. Inclusion of petrol in GST will require recommendation of the GST Council.

The Union Civil Aviation Ministry has also been lobbying with the Finance Ministry to bring ATF into the ambit of GST. If ATF is included as a part of GST, airlines will enjoy the benefit of input tax credit which is currently not applicable as jet fuel is taxed under VAT.

This would be the first Council meeting after the 2024 Lok Sabha elections. The last time the GST Council had convened was on October 7, 2023.

Source from: https://www.moneycontrol.com/news/business/economy/fuel-inclusion-under-gst-not-on-agenda-for-june-22-council-meet-official-12752531.html