Fuels to remain outside GST regime: CBIC

Decision in view of high revenue implications, it tells HC

December 08, 2021 06:11 pm | Updated 06:11 pm IST - KOCHI

A GST Council meeting had decided against the inclusion of petrol and diesel under the GST in view of high revenue implications of such decision and fiscal constraints induced by the COVID pandemic, according to a statement filed before Kerala the High Court by the Central Board of Indirect Taxes and Customs (CBIC).

The court had last time directed the CBIC to state the genuine reason why petroleum products could not be brought under the GST regime when public interest litigation seeking to include them under the GST came up for hearing.

Need for deliberations

In the statement, the CBIC said that the 45th GST Council meeting after due deliberations decided that it was not appropriate to bring petroleum products under the GST regime as it involved higher revenue implications and, therefore, required larger deliberations.

Besides, at the time of fiscal constraints induced by the pandemic, it would be difficult to bring petroleum products under the GST regime.

The Centre and the States were extending stimuli in all areas for the recovery of the economy from the disruptions caused by COVID-19. Tax revenues were required to ensure that the socio-economic initiatives undertaken in the larger public interest were not adversely affected, the statement added.

It also pointed out that the Council had been empowered by the Constitution of India under Article 279A to recommend the date on which the GST could be levied on petroleum products.

Thus, the recommendation to bring the petroleum products under the GST was left to the discretion of the GST Council which was represented by the Centre, States and Union Territories. In fact, the recommendations of the Council were based on decisions taken after following the procedure under 279A of the Constitution, it said.

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