Bringing fuel under GST will rob states of revenue: HD Kumaraswamy

BENGALURU: The states that have been burdened by a serious drop in revenue because of Covid will suffer further if petrol and diesel are brought within the ambit of Goods and Services Tax (GST), said Janata Dal (Secular) leader and former chief minister H D Kumaraswamy here on Sunday, while 
talking to The New Indian Express. 

“We have already suffered on the GST front because we have not got our rightful due. By bringing fuels under the GST regime will further increase the suffering of the state. How can GST be collected at 60 per cent of the cost of petrol and diesel,’’ he asked. 

He said framers of the Constitution have entrusted certain powers on states and bringing petrol and diesel under GST would rob them of crucial revenues. 

Asked if the JDS will  oppose the proposal in the  Assembly, he said, “We may have to do that.” He appealed to Chief Minister B S Yediyurappa not to allow the change as the cess from the fuels is a major source of income for the state. 

The Central Government levies high taxes and collects more revenue than states. It is trying to push fuels under GST as increasing prices of petrol and diesel have infuriated people.

Using this anger, the Centre has said that with GST, petroleum product prices would fall by  Rs 15-20 per litre. “But it would pose a grave danger to the states,” warned Kumaraswamy, who has presented four state budgets.

The former chief minister alleged that the Centre has not yet provided the compensation which the states had to receive after the GST was approved.

“With the Centre yet to remit thousands of crores in dues, the state governments have been literally begging for their arrears,” he added.

With fuels under GST, the states will suffer without money for development projects, forcing them to present either a deficit budget or reduce the size of the budget.

“If the Central Government is concerned about oil prices, it should immediately reduce taxes levied by it and also direct the states to follow suit. Many states have already objected to petroleum products being brought under GST. Karnataka too should lodge its opposition to the proposal,” he said.