If petrol, diesel, and other petroleum products are brought under a unified, nationwide GST regime, Nitin Gadkari, a Union minister, believes that taxes will be reduced even lower and that both the Centre and the states will generate more income. If state governments back her, Finance Minister Nirmala Sitharaman will surely try to bring petrol and diesel under GST, Gadkari said while speaking virtually at the Times Now Summit, according to news agency PTI.
State finance ministers are also members of the GST Council. Some states are opposed to integrating gasoline and diesel into the GST system. “If petrol and diesel are brought under the GST regime, taxes on these items will be lowered, resulting in increased revenue for both the Centre and the states,” the minister added.
The GST council debated the subject in September, after being requested by the Kerala high court, and ruled against bringing petrol and diesel under GST. Because the states were opposed to the proposal, the council opted to exempt gasoline and diesel from the GST. Incorporating petrol and diesel under the GST will have resulted in near-record-low rates. However, combining the current excise duty and VAT (value-added tax) into a single national rate had an impact on revenue.
Sitharaman stated that the Council only examined the topic because the Kerala high court had requested it, but that it did not believe it was the appropriate moment to bring petroleum goods under GST. “It will be submitted to the High Court of Kerala that it was discussed and the GST Council felt that it wasn’t the right moment to include petroleum goods into the GST,” she said after the meeting of the GST council.
“In the same way that the Centre has provided relief to the common man (by cutting excise duty on petrol and diesel by 5 and 10 per litre, respectively), there is an expectation that the states will cut taxes (VAT rates) on diesel and petrol to provide relief to the common man,” Gadkari said in response to the recent excise duty cut.
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