The government wants inclusion of petroleum products under the proposed Goods and Services Tax (GST) but a decision on this would be taken only if state governments were agreeable, a union minister told parliament on Monday.
“In principle, petroleum products should come under the GST ambit, but a final decision will be taken when state governments come on board,” Petroleum Minister Dharmendra Pradhan said in a reply during Question Hour in the Lok Sabha.
He said nearly 52 per cent tax was levied on petroleum products by both central and state governments and the revenue thus generated was used on welfare and infrastructure projects.
“Around 32 per cent tax is levied by the Centre on petroleum products and around 20 percent by state governments,” he said.
“We are a welfare state. The government is committed to the welfare of the people and the country. The taxes levied by the central and state governments are used for various infrastructure and social sector projects,” he added.
Pradhan said prices of petrol have become market-linked with effect from June 26, 2010, and of diesel from October 19, 2014.
“Since then, public sector oil marketing companies take appropriate decision on price of these products in line with changes in the prices in the international market and other market conditions,” he said.
The committee on GST headed by Chief Economic Advisor Arvind Subramanian, which submitted its report last week, recommended inclusion of alcohol and petroleum products under the GST ambit, as demanded by the opposition Congress.