States Need To Agree On Inclusion Of Petrol, Diesel In GST, Says Nirmala Sitharaman | Exclusive
The provisions necessary to include petroleum products under GST have already been made and it is up to the GST Council to discuss and make the decision, she said.
Petrol and diesel are currently taxed under VAT rather than Goods and Services Tax, but Finance Minister Nirmala Sitharaman has highlighted that the GST law already contains provisions for their inclusion. She emphasised that for this transition to take place, states must unify and reach a consensus in the GST Council.
"If they fix the rate and they all come together and decide that GST will include petroleum products, then we can implement it immediately," Sitharaman told NDTV Profit in an exclusive interview.
She also said that the provisions necessary to include petroleum products under GST have already been made, and it is up to the GST Council to discuss and make the decision.
Presently, the rates of petrol vary from state to state depending on the local incidence of taxation. However, the states are not willing to include petroleum products under GST as it could lead to revenue losses for the states.
GST is being considered as a solution for the problem of high rates of petrol and diesel in the country, as it would end the cascading effect of tax on tax (state VAT being levied, not just on the cost of production but also on the excise duty charged by the centre on such output).
According to Prime Minister Narendra Modi, petroleum products are taxed at close to 60%, with the state gaining Rs 2.5 lakh crore and the Centre making Rs 2 lakh crore. By bringing petrol and diesel under GST, the government will bring a 28% tax slab over these products, as that is the highest slab in the tax regime.
Sitharaman also touched on topics of the development of cities beyond major metros, financial regulation, particularly concerning derivatives and the Income Tax Regime Committee.
