New Delhi. Will the states agree to impose GST on petrol, diesel and cooking gas and remove VAT? This question is being raised after Finance Minister Nirmala Sitharaman. Nirmala Sitharaman said after the GST Council meeting on Saturday that the central government wants to bring petroleum products under the ambit of GST, but the entire responsibility is on the states.
Nirmala Sitharaman said that when GST was implemented, the then Finance Minister Arun Jaitley had kept the path open for including petroleum products in it. This path is still open, but the states have to decide how much GST they want on petrol, diesel, LPG and aviation fuel. It is clear from this statement of Nirmala Sitharaman that in the coming time, the state governments may decide to bring other products including petrol under the ambit of GST. However, this matter is not expected to be resolved soon.
In fact, the state governments have not yet agreed to bring petrol, diesel, CNG, LPG and aviation fuel under the ambit of GST. State governments levy VAT i.e. value added tax on all these petroleum products. VAT is different in every state and due to this the price of petrol, diesel, aviation fuel, CNG and LPG is also different in every state. The central government also charges excise duty on all these petroleum products. Due to this, the price of petroleum products does not decrease much and this also increases inflation. Whereas, the states get a lot of revenue by imposing VAT. If petroleum products are brought under the ambit of GST, then the Center and the states will get equal tax. Whereas, the central government will also be able to earn separate income by imposing excise duty. Due to this also, the states have not taken steps towards imposing GST on petroleum products.