Oil Minister Dharmendra Pradhan said that “GST Council will decide on this (taxation of petroleum products). On behalf of the industry, I would request the states to allow petroleum products to be brought under GST taxation.”
The statement has been demanding the petroleum products to be enlisted under the GST scheme. He said this in a Global Investors Meet where he also stated that petroleum is currently under ‘state list’ for the purpose of taxation under GST.
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Other products like crude oil, natural gas, petrol, diesel, high-speed diesel and aviation turbine fuel are not included into the GST taxation structure and will continue to be taxed according to the current system.
The minister also said that “In the last 3-4 years, there is a healthy growth of petroleum products in Madhya Pradesh. I will request the Chief Minister that he should agree to (petrol items coming under) GST. There would be no loss to the state on account of taxation of petroleum products.”
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He acknowledged that there is 10 percent increase in rural consumption of petroleum products every year. And also according to the experts there would be a negative impact on the oil and gas industry due to compliance with dual taxation regime and non-creditable tax costs.
Uniform Tax Mechanism Is Much-needed To Combat The Expenses
The petroleum Minister urged to Union Minister to include petroleum products under the ambit of GST Net. The minister has supported his statement with the reasoning that we can narrow the government spending by uniform tax mechanism and utilize the money in center’s many developments and welfare projects to enhance the economy by applying the uniform tax on petroleum products.
Speaking of petroleum and natural gas, he said, “42% of the central tax is coming to states. And states have their own tax mechanism. So, a substantial portion of tax collection is utilised and coming to the states.” So the State listed petroleum products are needed to be revised and should come under GST to benefit the Center also.
The petroleum Minister appreciated the government’s efforts in spending INR 1.5 lakh per unit for housing and shared the concern over government’s expenditure and important aspects to support the growth of the economy. He further said, “There is no communication gap or mismatch (between domestic and global prices). Whatever is the international price we are passing exactly that to the Indian consumer. When it is increasing, we have to increase, when it is declining we have to decrease it. That is the practice in the country.”
