Petrol diesel under GST purview

Petrol diesel under GST purview

Subject – Economy

Context – A Division Bench of the Kerala High Court on Wednesday expressed dissatisfaction over the reasons given by the GST Council for not bringing petrol and diesel under the purview of the GST

Concept –

• Instead of GST, as of now, taxes like ‘Excise Duty’ and ‘VAT’ are being imposed on Petroleum goods like petrol, diesel, Air Turbine Fuel (ATF), natural gas and crude oil
• When GST was implemented in 2017, States did not allow these goods to be included in GST, because they were getting huge revenues (through VAT) on these goods.

Current taxation process for fuels –

• In the current structure, both the central and state governments levy a tax on petrol, diesel, crude, and natural gas.
• The Centre charges excise duty, while each state has its own Value Added Tax (VAT).
• Added to these are the dealer commissions, all of which inflates the price that consumers pay at the retail pumps.