Bengaluru: Karnataka Several states will join forces to oppose the proposal to bring petrol and diesel under the ambit of the Goods and Services Tax (GST) as there are concerns that such changes could reduce revenue. The GST Council meeting is scheduled to be held in Lucknow on Friday.
The Karnataka government has also decided to ask the Center to give GST compensation for two years.
Chief Minister Basavaraj said, “We will request the Center to continue giving compensation as we need time to recover from the economic slowdown caused by the COVID-19 pandemic. We will present our case with proper data.” bommai, which holds the finance portfolio.
Bommai has authorized Commercial Tax Commissioner C Shikha to attend Friday’s meeting on his behalf as he is scheduled to attend the event. kalyan karnataka liberation day. Bommai has given two letters to Shikha: a petition for a longer compensation period and another detailing Karnataka’s views on the proposal for GST for fuel.
The central government is exploring another option to check high fuel prices. It had asked states to share their views on the subject, which would be discussed in the GST Council. The Kerala High Court had also asked the Center to take an appropriate decision. Experts have independently suggested a separate, fixed tax structure for fuel.
“Not only Karnataka, almost all the states are concerned about the revenue implications and they will oppose the proposal. But it is a much needed reform in the long term,” said BT Manohar, a member of Karnataka State GST Advisory Council.
Experts say that moving petrol and diesel under the GST regime will reduce the burden on consumers as retail prices will come down.
For example, a liter of petrol in Karnataka currently attracts Rs 59 – Rs 32.9 central additional excise duty (AED) and 35% state sales tax on the base price (Rs 41.8) plus the AED.
The GST will attract a maximum tax of 28% on the base price of petrol and as a result the retail rate will come down to Rs 59.2 (including dealer commission of Rs 3) from the current Rs 104.7 per litre. Similarly, the price of diesel will fall from Rs 94 per liter to Rs 50. However, both the state and the center will lose a lot of revenue as they will have to share 28% equally. If the GST switch takes place, Karnataka’s average monthly revenue is expected to come down to Rs 600 crore from the current Rs 1,500 crore.
“An effective alternative would be the fixed tax regime, where a specific tax is levied on one liter of motor fuel, irrespective of the base price. This is imperative given the fluctuating nature of the base price, which is an international act. crude oil price in the market,” said KM Basway GowdaPresident of Akhila Karnataka Petroleum Dealers Association.
The Karnataka government has also decided to ask the Center to give GST compensation for two years.
Chief Minister Basavaraj said, “We will request the Center to continue giving compensation as we need time to recover from the economic slowdown caused by the COVID-19 pandemic. We will present our case with proper data.” bommai, which holds the finance portfolio.
Bommai has authorized Commercial Tax Commissioner C Shikha to attend Friday’s meeting on his behalf as he is scheduled to attend the event. kalyan karnataka liberation day. Bommai has given two letters to Shikha: a petition for a longer compensation period and another detailing Karnataka’s views on the proposal for GST for fuel.
The central government is exploring another option to check high fuel prices. It had asked states to share their views on the subject, which would be discussed in the GST Council. The Kerala High Court had also asked the Center to take an appropriate decision. Experts have independently suggested a separate, fixed tax structure for fuel.
“Not only Karnataka, almost all the states are concerned about the revenue implications and they will oppose the proposal. But it is a much needed reform in the long term,” said BT Manohar, a member of Karnataka State GST Advisory Council.
Experts say that moving petrol and diesel under the GST regime will reduce the burden on consumers as retail prices will come down.
For example, a liter of petrol in Karnataka currently attracts Rs 59 – Rs 32.9 central additional excise duty (AED) and 35% state sales tax on the base price (Rs 41.8) plus the AED.
The GST will attract a maximum tax of 28% on the base price of petrol and as a result the retail rate will come down to Rs 59.2 (including dealer commission of Rs 3) from the current Rs 104.7 per litre. Similarly, the price of diesel will fall from Rs 94 per liter to Rs 50. However, both the state and the center will lose a lot of revenue as they will have to share 28% equally. If the GST switch takes place, Karnataka’s average monthly revenue is expected to come down to Rs 600 crore from the current Rs 1,500 crore.
“An effective alternative would be the fixed tax regime, where a specific tax is levied on one liter of motor fuel, irrespective of the base price. This is imperative given the fluctuating nature of the base price, which is an international act. crude oil price in the market,” said KM Basway GowdaPresident of Akhila Karnataka Petroleum Dealers Association.
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