Delhi govt always in favour of GST on fuel, says deputy CM Manish Sisodia

NEW DELHI: A day after Union petroleum minister Hardeep Puri said the Centre wanted to bring petroleum under the ambit of goods and services tax (GST) but the states may not agree to the proposal, deputy CM Manish Sisodia said the Delhi government has always been in favour of this.

Replying to a query at a press conference, Sisodia said the Delhi government had written to the Centre to bring petrol and diesel under the GST regime when the new tax regime was implemented in 2017.

“We have always been in its favour, but it is the Centre that blames the states saying they may not agree to it and kept petrol and diesel out of the GST regime. In fact, the BJP-run states have been opposing it since the beginning,” Sisodia said.

Five commodities—crude oil, natural gas, petrol, diesel and aviation turbine fuel—were excluded from the ambit of GST when it was launched in July 2017. Both the Centre and states depended heavily on these for their revenues.

While Delhi levies 19.4% VAT on petrol and 16.75% on diesel, the rate varies from state to state. The value added tax on petrol is higher in states such as Telangana (35.2%), Rajasthan (31.04%), Andhra Pradesh (31%), Kerala (30.8%) and Madhya Pradesh (29%). In case of diesel, Telangana (27%), Odisha (24%), Maharashtra (24%) and Chhattisgarh (23%) levies maximum VAT. Sources said Delhi’s annual collection from VAT on the five products is over Rs 3,500 crore.

 

At the current retail price, the Centre levies 31% excise duty on petrol and 34% on diesel. “If petrol and diesel come under the GST regime, prices will become mostly uniform across all states and different VAT and excise rates that states and the Centre impose would then be done away with,” said an official. “This may help in bringing down the diesel and petrol prices to a large extent,” he added.

Since a chunk of revenue of both the Centre and states come from the tax collected from the sale of diesel and petrol, a uniform GST would deprive them of it. If the GST is imposed the tax collected will have to be shared equally between the state governments and the central government.

The petrol dealers, however, said they would be happy if the five products are brought under the GST regime. “The same tax structure will help streamline the system as the retail price would be uniform across the country,” said Rajeev Jain, an office bearer of Delhi Petroleum Traders Association.

 Source::: THE TIMES OF INDIA,     dated 16/11/2022.