Not the right time to bring Petrol and Diesel under GST

Bringing petroleum products under GST would substantially reduce petrol and diesel prices.

Not the right time to bring Petrol and Diesel under GST

Not the right time to bring Petrol and Diesel under GST

Bringing petroleum products under GST would substantially reduce petrol and diesel prices.

Finance Minister Nirmala Sitharaman stated that the Goods and Services Tax (GST) Council has discussed the topic of the addition of petrol and diesel under the tax structure after the Kerala High Court order. "On the direction of court it was brought on to the table but members their spoke very clearly that they do not want it to be included in GST”.

"This will be reported to the high court as the GST Council felt it was not the time to bring petroleum products under the GST.”

In June, the Kerala High Court, based on a writ petition, had asked the GST Council to decide on bringing petrol and diesel within the GST ambit. They gave six weeks time to the GST Council to decide whether bringing petrol, diesel, and three other petroleum products under GST would be possible.

It is worth mentioning that the states generate a worthwhile amount of revenue from taxing petroleum products. Each state has its own taxation structure for petrol and diesel. Under GST, even under the 28 percent tax slab, states will earn a lot less compared to what they currently earning from petrol and diesel sales as value-added tax (VAT).

The minister also announced that the GST rate on bio-diesel for blending with diesel has been reduced from 12% to 5%.

The Council also extended concessional GST rates on drugs used in COVID-19 treatment till December 31, the finance minister said.

Maharashtra Deputy Chief Minister and Finance Minister Ajit Pawar also said that if the tax structure is altered by the Union government in a way that adversely impacts the states’ revenue, the move will be opposed.

Nirmala Sitaraman said that online food delivery apps like Zomato and Swiggy must pay GST instead of the restaurants they pick up orders from. Although the Council mentioned that there's no new tax.

Assume you order the food from an aggregator and the restaurant is paying taxes. We found that some restaurants were not paying taxes. Now we are saying if you order via an aggregator, the aggregator will collect tax from consumers and pay to the authorities instead of the restaurant doing this. There is no new tax.