No GST on Petrol and Diesel Yet, Says CBIC Chairman Citing Revenue Concerns

There is no such possibility that price of petrol and diesel will come down due to purview of Goods and Services Tax (GST). Actually, Central Board of Indirect Taxes and Customs (CBIC) Chairman Sanjay Kumar Agarwal has said that it is not possible to bring petrol and diesel under the purview of Goods and Services Tax (GST) right now. The main reason for this is the huge revenue income to the central and state governments from these products.

Aggarwal told IANS that Central Excise Duty and Value Added Tax (VAT) are currently applicable on petrol and diesel. Both these products provide substantial revenue to the states through VAT and to the central government through excise duty. He said, given the revenue impact, it is not possible to bring these products under GST right now. For many states, the revenue received from VAT accounts for 25-30% of their total tax income.

Finance Minister Nirmala Sitharaman said last week that the central government deliberately did not include petrol and diesel in the proposal of the GST Council. She clarified, legally, we are ready, but this decision has to be taken by the states. Sitharaman said that even in 2017, at the time of implementation of GST, the then Finance Minister Arun Jaitley had discussed this issue. He said that if the states agree, the GST Council will have to decide the tax rate, after which it will be included in the law.