The GST Council might on Friday consider taxing petrol, diesel and other petroleum products under the single national GST regime, a move that may require huge compromises by both Central and State governments on the revenues they collect by taxing these products.
The Council, in its meeting scheduled in Lucknow on Friday, may also consider extending the time for duty relief on COVID-19 essentials, according to sources in the know of the development. GST is being seen as a solution to the problem of near-record high petrol and diesel rates in the country, as it would end the cascading effect of tax on tax (State VAT being levied not just on the cost of production but also on the excise duty charged by the Centre on such output). In June, the Kerala High Court, based on a writ petition, had asked the GST Council to decide on bringing petrol and diesel within the goods and services tax (GST) ambit.
The sources said the question of bringing petrol and diesel under GST would be placed before the Council for discussion in light of the court asking the Council to do so.
When a national GST subsumed Central taxes such as excise duty and State levies like VAT, five petroleum goods — petrol, diesel, ATF, natural gas and crude oil — were kept out of its purview.