Petrol, diesel under GST unlikely in near future, say BJP, Congress leaders

Indian industry is raising the pitch to bring petrol and diesel under the GST for sure, but BJP and Congress leaders indicated on Wednesday that it is unlikely to be fructified in the near future with states not willing to get on board.

Senior Congress leader M. Veerappa Moily said his party held the view that the fuels have to be brought under the ambit of GST but added that now is not the time to do so as state finances are collapsing due to the adverse impact of the COVID-19-induced lockdown.

“The State finances will not permit that decision to be taken at this time of the crisis. Because States have been opposing that.

So, this is not the time to discuss or take a decision to bring them under GST”, the former Union Oil Minister told PTI.

The former Karnataka Chief Minister said he does not expect forward movement on the proposal for a year or two due to unwillingness of the states.

BJP Spokesperson and Rajya Sabha member G.V.L. Narasimha Rao said the Union Government had on many occasions proposed bringing petroleum and liquor under GST but the states were reluctant contending that they were their major source of revenue and they cannot allow these two items.

“So, the Central government was always willing and keen. But the State Governments had put their foot down. So, obviously, all decisions are made by GST Council by consensus. We could not arrive at a consensus with State governments on this”, Mr. Rao told PTI.


He, however, said, “This is a matter that can be considered in future GST council meetings. GST Council, whenever it meets, may relook at the possibility but States are reluctant. So, I don’t think this fructifying in the near future".

Industry body ASSOCHAM said on Tuesday sooner petrol and diesel are brought under the GST (Goods and Services Tax), better it would be for the Indian economy.

According to ASSOCHAM Secretary General Deepak Sood, governments, both at the Centre and States have been over - dependent on petrol and diesel for revenue.

“While this over-dependence needs to be brought down, there is a strong case for a national parity for the prices of the automobile fuel”, Mr. Sood said.

“Otherwise, the broader objective of a single market under the GST remains unfulfilled".

He said the industry has been seeking a bold stimulus package for providing immediate relief as it was reeling under the 42-day lockdown, due to the Covid-19 crisis.

One of the main reasons for the stimulus is to revive the demand by way of tax reductions.

“But, on the contrary, if taxes are raised, demand would be further depressed, giving a jolt to the economy”, Mr. Sood said.

In any case, the crude oil prices have crashed to unprecedented lows, without the pump prices being reduced, against the spirit of the market-driven pricing policy, the ASSOCHAM said.

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Printable version | May 26, 2020 12:51:13 PM |

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