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Petrol, Diesel Under GST

December 21, 2017

Government Ready To Include Petrol, Diesel Under GST: Arun Jaitley

He said that petroleum products have not been kept out and were a part of the GST legislation but the decision to levy GST on these products can be taken only after the GST Council clears it with 75 per cent or three-fourth majority.

The Central government favours bringing petroleum products under the ambit of Goods and Services Tax (GST) but only after building a consensus with states, Union Finance Minister Arun Jaitley said on Tuesday.

"As far as the Central government is concerned, we are in favour of bringing petroleum products under the GST, let me categorically put it. But we will wait for the consensus of the states. And I do hope that at some stage sooner than later the states would agree to it," Jaitley told the Rajya Sabha in reply to a question.

He said that petroleum products have not been kept out and were a part of the GST legislation but the decision to levy GST on these products can be taken only after the GST Council clears it with 75 per cent or three-fourth majority.

He added that no further amendment to any law would be required for the same as the 115th Constitutional amendment already provides for it.

Replying to a supplementary by Congress leader and former Finance Minister P. Chidambaram, Jaitley pointed out that the draft proposal for the GST-related Constitutional amendment presented by the United Progressive Alliance (UPA) government had not included petroleum products to be part of the GST "because the UPA knew it would be a deal breaker with the states".

"After a great deal of discussion, we persuaded the states to bring petroleum products under GST. Initially, the states were not agreeing but later they reluctantly agreed to it. In meeting after meeting of the Empowered Committee, we persuaded them.

"And finally the deal with the states was that the GST Council will move ahead for bringing petroleum products under GST only after the states would agree to it," Jaitley said.

The Minister pointed out that a large share of duties on petroleum products were levied by the states.

He said that in the face of rising crude prices, the Centre decided to reduce its duties and asked the states to follow suit. "The NDA-ruled states readily agreed to it but the UPA-ruled states refused to do so."

The states were unwilling to allow petroleum products under GST as after the GST came into play, the states have only petroleum and liquor as their independent sources of taxes. Taxes on rest of the products and services would go to the Central government that would dole out the states' share.

 

Petrol, Diesel Rates In Top Cities On December 20

Petrol rates were hiked by 8 paise per litre and diesel prices were increased by 10-16 paise per litre in Delhi, Mumbai, Chennai and Kolkata today (December 20). With Wednesday's revision, effective 6 am December 20, petrol price is at Rs. 69.35 per litre in Delhi, Rs. 72.11 per litre in Kolkata, Rs. 77.25 per litre in Mumbai and Rs. 71.87 per litre in Chennai, according to Indian Oil Corporation's website - iocl.com. Diesel rates were at Rs. 58.75 per litre, Rs. 61.41 per litre, Rs. 62.03 per litre and Rs. 61.88 per litre, respectivelyWith this increase, petrol rates in the four metros - Delhi, Kolkata, Mumbai and Chennai - are up 11-73 paise per litre so far this month. Diesel rates have increased by 36-98 paise per litre during this period. On November 30, 2017, petrol retailed at Rs. 69.24 per litre in Delhi, Rs. 72 per litre in Kolkata, Rs. 76.52 per litre in Mumbai and Rs. 71.76 per litre in Chennai, according to Indian Oil Corporation, the country's largest fuel retailer. Diesel retailed at Rs. 58.39 per litre, Rs. 61.05 per litre, Rs. 61.05 per litre and Rs. 61.5 per litre, respectively, on the last day of November 2017.

Oil market companies Indian Oil Corporation (IOCL), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) switched to a daily revision system for petrol and diesel prices on June 16, 2017. Previously, the rates were changed every fortnight. The move to daily revision was in their bid to immediately pass on any movement in international oil prices to consumers and avoid sharp spikes by spreading them in small doses.

Since the shift to daily revisions, petrol price has risen by Rs. 2.44 per litre in Delhi, Rs. 2.59 per litre in Kolkata and Rs. 1.94 per litre in Chennai. Diesel price has increased by Rs. 2.81 per litre in Delhi, Rs. 3.13 per litre in Kolkata, Rs. 0.36 per litre in Mumbai and Rs. 2.66 per litre in Chennai, according to Indian Oil. In Mumbai, petrol price has fallen by Rs. 1.19 per litre during this period.

The government favours bringing petroleum products under the ambit of Goods and Services Tax (GST) but only after building a consensus with states, Finance Minister Arun Jaitley said on Tuesday. "As far as the Central government is concerned, we are in favour of bringing petroleum products under the GST, let me categorically put it. But we will wait for the consensus of the states. And I do hope that at some stage sooner than later the states would agree to it," Mr Jaitley told the Rajya Sabha in response to a question.

Petrol and diesel don't come under the ambit of GST (Goods and Services Tax). Besides, global prices, excise duty and VAT determine the domestic price of petrol and diesel. India relies on imports to meet 80 per cent of its needs and so domestic fuel rates have been aligned to movement of equivalent product prices in the international market.

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