No GST on petrol, diesel in near future

 ​New Delhi: Petrol and diesel will not come under the purview of Goods and Services Tax (GST) in the immediate future as neither the Central government nor any of the states is in favour on fears of heavy revenue loss, a top source said. When the one-nation-one-tax regime of GST was implemented in July last year, five petro-products - petrol, diesel, crude oil, natural gas, and aviation turbine fuel (ATF) were kept out of its purview for the time being. 

Though there have been talks in the industry and by some ministers, including by Oil Minister Dharmendra Pradhan and Road Transport Minister Nitin Gadkari, for the need to bring them under GST at the earliest to deal with volatility in prices, there is no immediate plans on the anvil to do so, the source, who wished not to be named, said. The Union finance ministry, he said, has not mooted any proposal to bring petrol and diesel or even natural gas under GST but took up the issue at the last GST Council meeting on August 4 based on media reports. 

"All states were opposed to the idea," he said. If the two fuels are put under GST, the Centre will have to let go Rs 20,000 crore input tax credit it currently pockets by keeping petrol, diesel, natural gas, jet fuel and crude oil out of the GST regime. States, on the other hand, want to keep a revenue tool in their hand to meet any contingency like the floods in Kerala, he said. 

The Centre currently levies a total of Rs 19.48 per litre of excise duty on petrol and Rs 15.33 per litre on diesel. On top of this, states levy Value Added Tax (VAT) - the lowest being in Andaman and Nicobar Islands where a 6 per cent sales tax is charged on both the fuel. Mumbai has the highest VAT of 39.12 per cent on petrol, while Telangana levies highest VAT of 26 per cent on diesel.