Can’t cut taxes; bring petrol, diesel under GST, says state

MUMBAI:THE state government is in favour of bringing petrol and diesel into the Goods and Services Tax (GST) regime. After the state government submitted its request in the GST Council a few months ago, it now expects the prices of petrol and diesel to reduce roughly by ₹5 to ₹6 per litre if they are brought into the ambit of GST.

Finance minister Sudhir Mungantiwar said on Tuesday that the government has requested the GST Council, comprising finance ministers of all states, for bringing the fuel into the ambit of the GST. Admitting that the price rise in the retail prices of the fuel was unbearable for the common man, Mungantiwar said it would not be possible for the state government to reduce state taxes.

“We have reduced the Value Added Taxes (VAT) on petrol twice last year giving respite of ₹3,067 crore to the citizens. In diesel prices, Maharashtra is eighth

in the country, though petrol is the most expensive in Maharashta across the country. In some cities like Mumbai, there is surcharge on the fuel levied to fund the infrastructure products. Once brought under GST, the petrol prices will be uniform across the country.”

According to an official from the finance department, petrol and diesel prices are likely to reduce by ₹5 to ₹6 per litre if they are included in the highest GST tax rate slab of 28%. “It is very complex to calculate the reduction of price as there are too many factors involved in it. Even if it is decided to bring the fuel prices in the GST regime, it may need at least a few weeks to study its implications. There will be input credit to the industries using diesel and to the oil companies for the tax they pay for their services and machinery. This would help in reducing the price,” said the official.