It is likely that the Narendra Modi government at the Centre will bring petrol and diesel under the ambit of GST. Union Finance Minister Nirmala Sitharaman said on Saturday that the central government has always intended to bring petrol and diesel under the ambit of GST. But now the states will have to decide the rates together. She said that former Finance Minister Arun Jaitley has already made a provision to include petrol and diesel in the GST Act. Now all the states will have to come together and discuss to decide the rates.
When GST was implemented on July 1, 2017, it subsumed over a dozen central and state levies. But it was decided that crude oil, natural gas, petrol, diesel and aviation fuel (ATF) would be taxed under the GST Act later.
What did the Finance Minister say?
Nirmala Sitharaman said that while implementing GST, the central government had intended to bring petrol and diesel under the ambit of GST after some time. “The provision for bringing GST has already been made. Now the only thing that needs to be decided is that the states agree in the GST Council and then decide what rate they are ready for.’ After the 53rd meeting of the GST Council, Sitharaman said that once a decision is taken, it will be implemented in the Act.
Along with this, Finance Minister Nirmala Sitharaman said that out of the total 58.62 lakh taxpayers under the Central GST administration, less than two percent of the taxpayers have been sent tax notices. She said that the government wants to make life easier for GST taxpayers by reducing compliance requirements. Central GST has sent notices to only 1.96 percent of all active taxpayers on behalf of CGST.
If the current maximum tax slab of 28% is applied to petroleum crude, high-speed diesel, motor spirit (also known as petrol), natural gas and aviation turbine fuel, consumers will have to pay less for it than the current price. If petrol and diesel come under the ambit of GST, its prices will fall drastically.
