Why do petrol and diesel prices not fall under GST? By Vishesh Jangir


GST (Goods and Service Tax) in India is regarded as one of the largest taxations that has taken place in India and also passed by the Indian Government. India has adopted two GST that means GST will be administrated both by the State Government as well as by the Central Government.

In keeping the federal structure of India, it is proposed that the GST will be issued both by the Central Government (CGST) and the State Government (SGST). Prime Minister Narendra Modi introduced GST in India on the midnight of 1st July 2017.The development of GST took many negotiations as well as revisions before getting launched in India in its final form in the year 2017.

Goods and Service Tax (GST) is an indirect tax in India imposed when a customer buys a good. GST is regarded as an indirect tax imposed on the sale, manufacture, buying of goods. The aim of GST is to remove all the indirect taxes imposed on goods by the Indian Central governments and State governments. But at present, few following items are kept out of GST in India and they are: petrol and diesel.

At present, the price of petrol and diesel consists of excise duty charged by the Centre and also value added tax by the states. Though GST was introduced on 1st July, 2017, petrol as well as diesel are kept out because of its higher dependence of states.

Minister of Oil Dharmendra Pradhan has requested the Minister of Finance Nirmala Seetharaman to bring the petroleum products out of GST. Petroleum products includes motor spirit (petrol), natural gas, high speed diesel, petroleum crude, aviation turbine fuel etc. are temporarily kept out of GST in India when it was introduced on 1st July, 2017. The products are kept out of GST because the prices of fuel are different in various states. Besides, the council of GST kept this product out from the GST because for the revenue the state government depends on them. However, the council shall decide the date from which the petroleum products shall be included under GST.

However, petroleum products are kept out of GST because there will be uniform prices of fuel in all over the country. Besides, petroleum products coming under the GST not means that prices as well as taxes will become less. Presently, India has four primary GST rates and they are 5 percent, 12 percent, 18 percent, and 28 percent.



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