'Petrol, diesel and alcohol to stay outside GST': FM Nirmala Sitharaman

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Finance Minister Nirmala Sitharaman said that petrol, diesel and alcohol products are unlikely to come under the GST regime in the immediate future, speaking with Network18 Group Editor-in-Chief Rahul Joshi in an exclusive interview.

Upon being asked if petroleum products and alcohol will continue to remain outside the GST, the finance minister said, “The current proposal does not include it", adding that they won't be included in the immediate future either.

"Not in the immediate future," Sitharaman said when asked about the timeline of their inclusion in the ambit of GST.

Implemented in July 2017, products like petrol, diesel, and alcoholic beverages were kept outside the ambit of GST since then, owing to the fact that these commodities are major revenue sources for both central and state governments through excise duty and value-added tax (VAT).

Under the apprehension that including them under GST would cause massive loss to fiscal autonomy for states, taxes on petrol, diesel and alcohol continue to be levied separately by the Centre and the state.

This has repeatedly caused high retail prices despite GST simplifying the indirect tax structure for 99% other goods and services.

Union Finance Minister Nirmala Sitharaman said that 99% of all goods and services touched by GST are now either in zero, 5%, or 18% and only 1% is being taxes as demerit or sin goods.

In an exclusive interview to Network18 Group Editor-in-Chief Rahul Joshi, Sitharaman spoke about GST 2.0 and the new slabs, saying that Prime Minister Narendra Modi-led government has worked towards simplifying the indirect taxes.

"That is the extent to which we have cleansed the system from anomalies, doubts, duplications and any interpretative issues," finance Minister Nirmala Sitharaman told CNBC-TV18.

Sitharaman said after the new GST slabs coming into force from September 22, only 1% of goods are under 40% demerit rate.

On September 3, the GST Council, led by Sitharaman, approved significant GST cuts on a number of items ranging from daily-use items like shampoo and hair oil to automobiles to TVs. After the 56th GST Council meeting, the finance minister also announced more simplified GST structure with only three tax slabs — 5%, 18% and 40%.