Bring petrol, diesel under GST: Assocham

3. Beware of the start-stop scam. A common method pumps use to scam motorists is filling up a lower amount ‘by mistake’. For example, say you have asked for fuel worth Rs 1,500. The attendant fills up only Rs 500 worth and after being pointed out his mistake goes ahead and pretends to reset the machine and fills up to Rs 1,000. All the while, you could be under the impression that you received Rs 1,500 worth of fuel. (Representative image)

Industry body Assocham on Tuesday demanded to bring petrol and diesel under the Goods and Services Tax (GST) to ensure uniformity in automobile fuel in the country.

The statement comes on a day when petrol price in the national capital was hiked by Rs 1.67 a litre and diesel by a steep Rs 7.10 per litre after the Delhi government raised local sales tax on the two fuels.

Sooner petrol and diesel are brought under the GST, better it would be for the Indian economy because changes in the GST are brought only after wider deliberations by the GST Council, said Assocham Secretary General Deepak Sood.

When the GST was introduced on July 1, 2017, petrol and diesel were kept out of its purview given the revenue dependence of state governments on this sector.

Sood said the industry has been seeking a bold stimulus package for providing immediate relief as it is reeling under the lockdown due to COVID-19 crisis.

One of the main reasons for the stimulus is to revive the demand by way of tax reductions.

"But, on the contrary, if taxes are raised, demand would be further depressed, giving a jolt to the economy," he said.

The central government too had raised excise duty on petrol and diesel by Rs 3 per litre each in March to raise an additional Rs 39,000 crore annually. This hike negated the benefit arising from international oil prices slumping to two-decade lows.

Last month, benchmark Brent crude oil dropped to as low as USD 18.10 per barrel - the lowest since 1999, as coronavirus wiped away demand, creating large surpluses around the globe.

D K Aggarwal, President, PHD Chamber of Commerce and Industry expressed apprehension that the increase in petroleum prices in Delhi would have a cascading impact on trade and industry. The industry is already reeling under huge pressure due to the daunting impact of pandemic COVID-19, and increase in fuel prices at this juncture will make goods and services dearer and thereby severely impacting the revival process of industrial activities in the coming times.

The increase in fuel prices will have a trickle-down effect resulting in rising costs of transportation, building up inflationary pressures amid an environment where income generation is already impacted due to pandemic COVID-19, said Aggarwal, urging Delhi government to roll back the hike.