GST inclusion will not bring down fuel prices: Balagopal

The claim that the inclusion of petroleum products under Goods and Services Tax (GST) will bring down fuel prices is baseless, Finance Minister K.N. Balagopal has said.

Fuel prices can be reduced if the Centre foregoes the huge amount collected as cess on petrol and diesel. There was a deliberate attempt to deceive the public by claiming that GST inclusion would bring down fuel prices, Mr. Balagopal, who had attended the 45th GST Council meet in Lucknow on Friday, said in New Delhi on Saturday.

The GST Council's decision to keep petroleum products out of the GST regime had, in fact, proven that there definitely was a point in the stand taken by Kerala and other States, he said.

“Moreover, if GST is applied to an item, the tax revenue of the State gets halved. Which means, the State stands to lose a big chunk of its present collection. This will have an adverse impact on the tax revenues of the States,” Mr. Balagopal said.

For protecting the interests of the States, keeping petroleum products out of GST and maintaining status quos was essential, he said.

The GST Council had also decided to go for a detailed study before raising the tax on coconut oil, Mr. Balagopal said. Kerala, and States including Tamil Nadu and Goa, had strongly opposed the fitment committee proposal to levy GST at 18% for coconut oil sold in containers of less than one litre, he said.

Singling out coconut oil for the higher tax was discriminatory and imposed additional burden on people who purchased smaller coconut oil packs for cooking, Mr. Balagopal said.

While States, including Kerala, had demanded an extension of the compensation period under GST beyond July 2022, this request was turned down. The Centre had also announced its decision to levy compensation cess on items for another five years.

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Printable version | Dec 7, 2021 12:43:10 PM |

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