With the Union Budget just a couple of weeks away, the clamour for inclusion of petroleum products under the ambit of GST has gained momentum with experts spotlighting the move’s significance in reducing the prices for end users.
Petrol, diesel, ATF is out of the purview of GST and attracts taxes like central excise and state VAT. The different layers of taxation add to the overall cost burden and the industry stakeholders have asked for its inclusion in GST to claim input tax credit.
The move, if makes a headway in the Budget 2023, will be significant in giving a push to the logistics sector as it plays a pivotal role in accelerating India’s economic growth. It has major employment generation potential as well.
Fuel is a major spend for logistics industry and if fuel is included in the GST, it will help in reducing the overall costs and benefiting consumers. This will help in bringing down the inflation burden as well.
So far, there hasn’t been any indication from the GST Council that fuel will be made a part of the GST. In 2021, finance minister Nirmala Sitharaman had stated that the GST Council members, in its 45th meeting, decided not to include fuel under GST.
Fuel prices were brought down last year after the Centre cut excise on petrol and diesel and the states followed suit in reducing VAT.
States have also resisted the move as it could hit their revenue generation. Last year, finance minister Nirmala Sitharaman had urged states to reduce VAT after Centre’s excise duty cut to bring down the prices for consumers.
International crude oil prices had surged after the Russia-Ukraine war. However, India’s deft energy management policy has largely kept the crude oil basket in check as the proportion of Russia’s share has consistently gone up and reached 22% in October trumping some of the traditional suppliers like Iraq and Saudi Arabia.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
