Centre ready to bring petrol, diesel under GST ambit: Hardeep Singh Puri

NEW DELHI:  The government is ready to bring petrol and diesel under the Goods and Services Tax (GST) regime, provided the states agree on it, said Petroleum and Natural Gas Minister Hardeep Singh Puri said on Monday. 

The minister also noted that many countries in the world are witnessing the shortage of fuel and exorbitant price rise but there is no shortage of fuel in the country.  “For bringing the petrol and diesel under the GST, the states have to agree. If the states make the move, we are ready. We have been ready all along. It is another issue how to implement it.

That question should be addressed to the finance minister,” Hardeep Singh Puri told reporters here. Whenever the transport fuel price goes up in the domestic market, the demand of bringing petroleum products under the GST ambit comes to the fore.  It is believed petrol and diesel prices will come down if it is brought under GST. However, states are not willing to bring it under  the GST regime as it would mean giving up the right to fix indirect tax rates on sale of petroluem products.   

Both Centre and states earn hefty amounts of tax from petroleum products. The Centre fetched Rs 3.63 lakh crore via levy of excise duties on these products in 2021-22. The states earned Rs 2.56 lakh crore via VAT/sales tax on these products. If petroleum products are brought under GST, states will lose flexibility to adjust sales tax or VAT rates as per their revenue needs.

 Meanwhile, the minister said petroleum prices have seen a sharp rise from July 2021 to August 2022 with 43% to 46% in the US and Canada, while India was the only country where there was only 2% rise during this period. “When many countries are witnessing shortage of fuel and price rise, there is no shortage of fuel in India even in the remotest corners of the country,” said the minister.