FUEL UNDER GST

With price volatility remaining high in the global market as far as fuel prices are concerned move to bring them under the ambit of Goods and Services Tax (GST) would be a big relief for the domestic consumers. Not only this, the direct impact of such a big decision would be on the prices of essentials and grains which of recently has seen an inflationary trend. Industrial production has seen slowdown with Gross Domestic Product (GDP) too slowing down its pace. The spike in petrol rates in the international market has impacted the cost of the fuel in India. Economically the move would be welcomed by every Indian as they would feel a big relief on the fuel bill every month and politically it would be a trump card for the coming state and Parliamentary elections for Bharatiya Janata Party. Once brought under GST, prices of petrol and diesel are likely to stabilise and may remain an affordable low. GST on petrol and diesel means doing away with the excise duty imposed by the Centre and the VAT (Value Added Tax) levied by the states. Under the Goods and Services Tax, the maximum tax imposed on petrol and diesel will be capped at 28 per cent. The government, however, may choose to levy an additional cess on diesel and petrol. Finance Minister Arun Jaitley recently said that the Central government favours bringing petrol products under the GST umbrella but is looking for consensus with state governments to do the same. Trade and industry bodies have been demanding for rationalisation of fuel prices. Confederation of Indian Industry (CII) has asked the government for inclusion of oil and natural gas in the new Goods and Services Tax (GST) regime at the earliest. The GST was rolled out from July 1, 2017 by subsuming most of the central and state indirect taxes into a single tax. But, crude oil, natural gas, diesel, petrol and aviation turbine fuel (ATF) have not been included in the ambit of GST as of now.