New Delhi: The 45th meeting of the Goods and Services Tax (GST) Council in Lucknow assumes significance as the council is expected to discuss whether diesel, petrol and other petroleum products will be exempted from GST How to bring it within .
This will be the first time in 20 months that the GST Council will meet. After December 18, 2019, all the meetings of the GST Council were held virtually.
Delhi and Chhattisgarh are in favor of bringing petrol, diesel and other petroleum products under the ambit of GST.
Stating that the global crude oil prices are coming down but it has no effect on the fuel prices in India, Chhattisgarh CM Bhupesh Baghel said, “Apart from bringing fuel prices under the ambit of GST, SEZs set up by the central government should also be done away with.”
Delhi Deputy Chief Minister Manish Sisodia said he had already called for bringing fuel prices under GST, but it was not supported by the ruling parties.
However, BJP’s Rajya Sabha MP Sushil Kumar Modi is against this move. He had said that the central and state governments will have to bear the loss of revenue of Rs 4.10 lakh crore and this is impossible to implement in the covid affected economy, which will be further emphasized.
In the last meeting held on June 12, the tax rates on various Kovid-19 medicines and essential commodities were reduced till September 30.
Impact on fuel prices if it comes under GST
If the GST Council plans to cover fuel prices under its regime, all states are likely to have a maximum tax of 28 per cent on the base price of petrol, diesel.
It will replace the various rates of excise duty and VAT that the Center and states used to levy on fuel prices with a uniform GST rate across the country.
For example, the base price of petrol in Delhi is Rs 40.78 and the amount for dealers after adding freight charges is Rs 41.10. According to the Indian Oil website, this is the base price of petrol in Delhi.
Now, adding excise duty of Rs 32.90, dealer commission Rs 3.84 and VAT on dealer commission of Rs 23.35, the retail price of petrol in Delhi is Rs 101.19.
With prices being brought under the GST regime, this excise duty (which forms the Centre’s share) and VAT (state’s share) will be abolished and 28 per cent GST will be levied on the base price which will be Rs 11.50. .
Add to this the dealer’s commission of Rs 3.84, then The retail price of petrol will be reduced to Rs 56.44According to the calculations of Times of India.
Similarly, according to IndianOil’s website, Rs 41.27 is charged from dealers in Delhi for diesel. According to the calculation according to the new system, Price will come down to Rs 55.41 Currently from Rs.88.62.
This clearly means that with petrol and diesel coming under the purview of GST, the burden on consumers will be reduced. However, tax experts believe that the current situation due to COVID-19, bringing petro products under GST will be a very tough call for both the Center and the states.