One year of GST: Will petrol, diesel finally come under GST? Here’s what Finance Secretary says : 27-06-2018

The goods and services tax (GST) framework underwent a series of changes in the first year of its introduction. In the second year, the indirect tax regime is expected to usher in inclusion of items still outside its ambit, mainly some of the petroleum products, including petrol and diesel. Even though there have been talks about the government mulling over a plan to include these two petroleum products under GST, Finance Secretary Hasmukh Adhia said that it’s for the Council to decide.

The GST Council will take a view whether they want to bring petrol and diesel under GST or not, Finance Secretary Hasmukh Adhia told The Indian Express in an interview. “As far as those two items (petroleum products and real estate) are concerned, it is for GST Council to take a view whether they want to bring these items in GST or not. Discussions will continue. When, I cannot say. It will be discussed at suitable time,” he said. On being asked about the probability of inclusion of natural gas and ATF under GST, he said, “Natural gas and ATF are “two easier candidates for inclusion” under GST, but the timing will have to be determined by the GST Council.”

Expected GST structure for petrol, diesel

A peak tax rate of 28 percent plus states levying some amount of local sales tax or VAT on petrol and diesel is likely to be the tax structure when the two auto fuels are covered under the GST regime, an unidentified government official told PTI a few days back. The peak GST rate plus VAT will be equal to the present tax incidence, which is made up of excise duty, levied by the central government, and VAT charged by the states.

But before the two fuels are put under GST, the Centre has to decide if it is willing to let go of the about Rs 20,000 crore of input tax credit it currently pockets by keeping petrol, diesel, natural gas, jet fuel and crude oil out of the Goods and Services Tax (GST) regime that came into force from July 1, 2017, the official told PTI.

“There is no pure GST on petrol and diesel anywhere in the world and so in India too it will have to be a combination of GST and VAT,” said the official, who is closely involved with the GST implementation.The timing of including petro products in GST will be a political call which centre and states have to take collectively, he said.

Source : Financial Express

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