A measure aimed at shoring up state finances, battered by low oil prices and a severe coronavirus-driven slowdown.
When the Goods and Services Tax (GST) was introduced on July 1, 2017, amalgamating 17 central and state levies, five commodities namely crude oil, natural gas, petrol, diesel, and aviation turbine fuel (ATF) were kept out of its purview given the revenue dependence of state governments on this sector.
Sunit Bagai, president of the Rajasthan Petrol Diesel Association (RPDA) said fuel pumps located in the border areas are on the verge of shutdown due to increased VAT rate.
Price tags for products listed on the Apple's China website were lowered on April 1 morning, including a discount of up to 500 yuan ($74.44) for some of its latest iPhone models.
Apart from custom and excise duty, airlines pay each state a value added tax ranging between 3 to 30 percent on ATF
The Modi government being sensitive to problems of people due to rising prices of petrol and diesel, reduced Rs 2.5 on it and now it is Kejriwal's turn to do the same and reduce the prices by at least Rs 5, the minister said.
While a cut in excise duty that the central government levies will impact fiscal deficit, states like Bihar, Kerala, and Punjab are not in a position to cut sales tax (or VAT), the official said.
The scheme would support airline operators with concessions by the central government, state governments and airport operators to reduce the cost of airline operations on regional routes, or other support measures, the Cabinet meeting was informed.
The peak GST rate plus VAT will be equal to the present tax incidence, which is made up of excise duty, levied by the central government, and VAT charged by the states.
Oil marketing companies can also be asked to slow down the pace of increase in price revisions and absorb some of the cost
Crude oil prices have risen to about $80 a barrel from about $55 in October.
In this year, petrol prices have been raised by Rs. 4.05 per litre in Delhi, Rs. 4.01 per litre in Kolkata, Rs. 4 per litre in Mumbai and Rs. 4.26 per litre in Chennai.
Brewing geopolitical tensions coupled with fears of trade wars and inventory cuts are expected to keep crude up in the near term
These include nuclear, oil, gas, coal, petrochemical and aircraft equipment, the Ministry of Finance said on its website.
Saudi Arabia compounded the New Year blow for motorists with an unannounced hike of up to 127 per cent in petrol prices with immediate effect from midnight.
Due to lack of interface in place between the Goods and Services Tax network with the customs electronic date interchange (EDI) and the Directorate General of Foreign Trade (DGFT), the Centre is using ledger for manual records for refunds, Mitra said.
“Government is in favour of bringing petroleum products under GST. We would like to await consensus of the states and hope states at some stage soner or later agree to the consensus,” said Jaitley.
"Coal has been included and levied with 5 per cent tax but gas is outside GST, how fair is that," he said at the KMPG Energy Summit here.
"The Madhya Pradesh government has decided to reduce VAT on petrol by 3 per cent. The VAT on diesel is reduced by 5 per cent. Moreover, the additional cess of Rs 1.50 per litre has also been withdrawn," state Finance Minister Jayant Malaiya announced after a meeting with Chief Minister Shivraj Singh Chouhan.
It is unlikely that the government would want to tinker with the GST structure and introduce any slab higher than 28 percent. But if it decides to bring it under GST, it will be at a huge cost.
Earlier in the day, Gujarat became the first state to announce a reduction it VAT on diesel and petrol. In a move seen as an attempt to lure voters in the poll-bound state, the Vijay Rupani dispensation announced a 4% reduction in VAT.
Move follows the Centre decision to bring down down excise duty on petrol and diesel by Rs 2 per litre
The relief to the consumers comes at the expense of government finances that are already struggling
The Centre had requested states to reduce the VAT rate on ATF by one per cent, to encourage flight services connecting important cities in the country.
Tax collected in the maiden filings under the GST regime, which kicked in from July 1, are still being compiled as the last date for filings under different rules is not yet over, he said.