Home Economy Petrol, diesel not under GST: Sitharaman explains why

Petrol, diesel not under GST: Sitharaman explains why

The GST Council did discuss bringing petrol and diesel under GST in its meeting, but one objection proved enough to reject the idea

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Petrol, diesel not under GST: Sitharaman explains why

Union Finance Minister Nirmala Sitharaman today clarified that the proposal to tax petrol and diesel under Goods and Services Tax (GST) was on the agenda of the GST Council because of the Kerala High Court order. “This item came on the agenda for today’s discussion purely because Kerala high court order as some person approached the high court and the court said that this can be taken up by the GST Council. On the direction of the court, it was brought up and the members spoke very clearly that they do not want this under GST,” the finance minister said.

There is a popular theory that fuel prices would come down if they were to be taxed under the GST system although GST rates are decided always in consultation with the states that, just like the union government, charge half of the tax amount that is levied on petrol and diesel.

Addressing the speculation of fuel prices going up if the proposal gets okayed by the Council, the minister said the council felt it was not time to bring petrol and diesel under GST. Sitharaman said the decision would be conveyed to the court.

The finance minister announced revised GST rates on several medicines, including for the treatment of cancer. “We have taken quite a few people-friendly decisions. I am very happy that some of them are long-pending,” the minister said.

GST exemption has been given on expensive imported drugs like Zologensma and Viltetso, which are not for Covid, the minister said.  Reduced GST rates on Covid medicines has been extended till 31 December from 30 September, as decided by the GST Council, the minister announced.

The meeting is crucial as the council was supposed to take up the issue of bringing petrol and diesel under GST. All states have unanimously rejected the proposal, different media outlets reported.

Another contentious issue taken up by the GST council was imposing GST on Swiggy and Zomato, which would make online food orders more expensive. The GST Council approved this proposal.

The GST Council decided in favour of increasing the GST on fruit juice too — from 12% to 28%, which will make fruit juice costlier.

The meeting was held to decide on issues like extending tax concession to drugs being used to treat the coronavirus disease and review tax rates of over four-dozen items, like oncology medicine and coconut oil. The council discussed the proposal for the inclusion of petrol and diesel under GST in the meeting. All eyes were on the outcome. This was the first physical meeting of the GST council in 20 months and the last one was held before the Covid pandemic, on December 18, 2019.

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