Petrol, Diesel Under GST: Council May Consider Bringing It Under Its Purview

The Kerala High Court had based on a writ petition earlier in June this year asked the Council to decide on bringing petrol and diesel within the GST ambit.

New Delhi: The GST Council, chaired by Union Finance Minister Nirmala Sitharaman, might consider taxing petrol, diesel and other petroleum products under the single national GST regime during its meeting in Lucknow on Friday.

The GST Council, according to sources, is also likely to consider extending the time for duty relief on Covid-19 essentials, PTI reported.

READ: Wholesale Price Index Inflation Rises To 11.39% In August On Back Of Higher Fuel Prices

The Kerala High Court had based on a writ petition earlier in June this year asked the Council to decide on bringing petrol and diesel within the GST ambit.

In view of the High Court’s observation, sources said bringing petrol and diesel within the GST would be placed before the Council, which comprises central and state finance ministers, for discussion.

When a national GST subsumed central taxes such as excise duty and state levies like VAT on July 1, 2017, five petroleum goods, including petrol, diesel, ATF, natural gas and crude oil, were kept out of its purview because both central and state government finances relied heavily on taxes on these products.

Since GST is a consumption-based tax, bringing petro products under the regime would mean the states where these products are sold get the revenue and not ones that currently derive the most benefit out of them because of they being the production centre.

The GST Council could also discuss the modalities of continuation of compensation cess beyond June 2022 besides considering extending the duty relief available on Covid-19 essentials.

The tax rates on various Covid-19 essentials were reduced till September 30 in the GST Council’s previous meeting, which was held via videoconferencing earlier on June 12.

This is the first time in 20 months that the GST Council, which is a governing body to regulate and direct each and every step for the implementation of goods and service tax in the nation with decisions over tax rates and further implementation measures, will have a physical meeting.

The last such meeting was held before the Covid-19-induced lockdowns earlier on December 18, 2019.