Is GST only way to get cheap petrol and diesel?
Thursday - June 21, 2018 12:28 pm ,
Category : WTN SPECIAL
GST on petrol and diesel is not solution to get them cheaper
JUNE 21 (WTN) - If you think that after imposing GST on petrol and diesel, its price will be cheaper, then maybe your guess is wrong. Because if GST is to be imposed by center government on petrol and diesel and then VAT would be implemented by state governments, so petrol and diesel would not be as cheap as you are thinking. According to the information, after imposing the GST, at the highest rate of 28 percent, on petrol and diesel, some local sales tax or VAT can be levied on behalf of the state governments.
According to the information, before the inclusion of these two fuels ie petrol and diesel to GST, the central government will have to think a lot. If the government bring petrol and diesel to the realm of GST, would it be willing to give up the revenues of Rs.20,000 crore due to the non-profit of credit in-house. Due to keeping petrol, diesel, natural gas and crude oil out of GST, The input tax credit is not available on these.
For your information, let you know that GST has been implemented from July 1, 2017 in India. There is no ‘pure GST’ on petrol and diesel anywhere in the world. Similarly, if GST is imposed on petrol and diesel in India then VAT will be imposed along with it. So it is difficult to add petroleum products in GST in India. This will be a political decision, so the central government and state governments will have to get together.
Let you know that the center charges Rs.19.48 per liter on petrol and Rs.15.33 per liter on diesel. Apart from this, VAT is imposed by the states on petrol and diesel. The lowest rate is in Andaman and Nicobar Islands where six percent sale sales on both the fuels. In Mumbai, the highest VAT on petrol is 39.12 percent. Most of the 26 percent VAT on diesel seems to be in Telangana. Thus, the total tax on petrol is 45 to 50 percent and diesel is 35 to 40 percent.
That is, if you are thinking that getting petrol and diesel in GST will make it cheap, then you are probably forgetting that the state can also impose VAT at the local level. It is believed that if the central government bring petrol diesel to GST then it would be kept at the rate of 28 percent of GST. After which it is natural that the state governments will also charge VAT. Even after getting GST in this way, petrol and diesel will not be as cheap as you are guessing. Petrol and diesel can be cheap only if crude oil is cheaper and the rupee is stronger than the dollar.
JUNE 21 (WTN) - If you think that after imposing GST on petrol and diesel, its price will be cheaper, then maybe your guess is wrong. Because if GST is to be imposed by center government on petrol and diesel and then VAT would be implemented by state governments, so petrol and diesel would not be as cheap as you are thinking. According to the information, after imposing the GST, at the highest rate of 28 percent, on petrol and diesel, some local sales tax or VAT can be levied on behalf of the state governments.
According to the information, before the inclusion of these two fuels ie petrol and diesel to GST, the central government will have to think a lot. If the government bring petrol and diesel to the realm of GST, would it be willing to give up the revenues of Rs.20,000 crore due to the non-profit of credit in-house. Due to keeping petrol, diesel, natural gas and crude oil out of GST, The input tax credit is not available on these.
For your information, let you know that GST has been implemented from July 1, 2017 in India. There is no ‘pure GST’ on petrol and diesel anywhere in the world. Similarly, if GST is imposed on petrol and diesel in India then VAT will be imposed along with it. So it is difficult to add petroleum products in GST in India. This will be a political decision, so the central government and state governments will have to get together.
Let you know that the center charges Rs.19.48 per liter on petrol and Rs.15.33 per liter on diesel. Apart from this, VAT is imposed by the states on petrol and diesel. The lowest rate is in Andaman and Nicobar Islands where six percent sale sales on both the fuels. In Mumbai, the highest VAT on petrol is 39.12 percent. Most of the 26 percent VAT on diesel seems to be in Telangana. Thus, the total tax on petrol is 45 to 50 percent and diesel is 35 to 40 percent.
That is, if you are thinking that getting petrol and diesel in GST will make it cheap, then you are probably forgetting that the state can also impose VAT at the local level. It is believed that if the central government bring petrol diesel to GST then it would be kept at the rate of 28 percent of GST. After which it is natural that the state governments will also charge VAT. Even after getting GST in this way, petrol and diesel will not be as cheap as you are guessing. Petrol and diesel can be cheap only if crude oil is cheaper and the rupee is stronger than the dollar.
