GST in limbo, but Centre works to include fuels

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NEW DELHI: The government is looking at ways to bring petroleum products under the ambit of the proposed goods and services tax (GST) with the consent of states, oil minister Dharmendra Pradhan told the Lok Sabha on Monday even as passage of the bill remains uncertain.

“Petroleum products will be brought under the GST, but I don’t know when. Since we have a federal structure, we have to get the consent of states. We are exploring various ways,” he said during question hour. Petroleum products have been kept out of the purview of GST but an in-principle decision has been taken to bring them under the proposed uniform tax regime.

GST would entail uniform tax rate on petro-products, if they are brought under the new tax, and eliminate wide variation in fuel prices. But since states make healthy earnings from sale of petroleum products by heavily taxing them, many have opposed bringing fuels and lubricants under the GST.

 The petroleum sector contributed more than Rs 1.6 lakh crore to state exchequers in 2015-16. Pradhan said except Tamil Nadu, Mizoram and a few Union Territories, most states had increased taxes on petroleum products and it was difficult to bring a uniform tax rate across the country. The minister also announced that the government would launch direct subsidy transfer for kerosene consumers on similar lines as LPG.

“Seventy-five per cent of the profits to be incurred through the DBT in kerosene would be distributed among the states,” Pradhan said, adding that plans were afoot to make Haryana a kerosene-free state after ridding Delhi and a few other Union Territories of the fuel.

 Replying to a supplementary, the minister refuted allegations that despite a fall in the international crude prices, retail prices in the country have not reduced, saying petrol prices were slashed 27 times and diesel prices 21 times in last two years.

Pradhan said despite international crude prices going down, cost of refining, transportation and other costs have not gone down. He said India being a welfare state, the benefits are being passed on to the people by way of better roads, good hospitals and other facilities.

Source: TOI

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