By FnF Correspondent | PUBLISHED: 17, Sep 2021, 19:36 pm IST | UPDATED: 17, Sep 2021, 19:40 pm IST
New Delhi: With the common man reeling under the higher cost of fuel prices, the 45th Goods and Services Tax (GST) Council meeting in Lucknow is significant because the council is expected to discuss how to bring diesel, petrol and other petroleum products into the ambit of GST.
This will be the first time in 20 months that the GST council will be meeting physically. After December 18, 2019, all the GST Council meeting was done virtually.
Delhi and Chhatisgarh are in favour of bringing petrol, diesel and other petroleum products into the purview of GST.
Deputy chief minister of Delhi Manish Sisodia said he had already called for fuel prices to be brought under GST but it was not supported by the ruling parties.
However, BJP Rajya Sabha MP Sushil Kumar Modi is against this move. He had said the Centre and state governments will have to bear a revenue loss to the tune of Rs 4.10 lakh crore and it is impossible to implement this in a Covid hit economy which will be further stressed.
In the previous meeting held on June 12 tax rates on various Covid-19 drugs and essentials were reduced till September 30.
Impact On Fuel Prices If It Comes Under GST
In case the GST council plans to cover fuel prices under its regime, then there will most likely be a maximum tax of 28 per cent on the base price of petrol, diesel across all states.
This will go on to replace the different rates of excise and VAT that the Centre and states used to levy on the fuel prices with a uniform GST rate across the country.
For instance, in Delhi, the base price of petrol is Rs 40.78 and adding the freight charges, the amount for dealers comes out to be Rs 41.10. This is the base price for petrol in Delhi, according to the Indian Oil website.
Now, adding the excise duty of Rs 32.90, dealer commission Rs 3.84 and VAT on dealer commission Rs 23.35, the retail price of petrol in Delhi stands Rs 101.19.
With prices being brought under the GST regime, this excise duty (which forms the Centre's share) and VAT (state's share) will be done away with and 28 per cent GST will be levied on the base price which will work out to be Rs 11.50.
To this add the dealer's commission of Rs 3.84, then the retail price of petrol will be reduced to Rs 56.44, as per Times of India calculation.
Similarly, for diesel, the price charged to dealers is Rs 41.27 in Delhi, as per the Indian Oil website. According to the calculation as per the new regime, the price will come down to Rs 55.41 from Rs 88.62 at present.
It clearly means that petrol and diesel under the GST ambit will reduce the burden on consumers. However, tax experts believe that the current situation due to Covid-19, bringing petro products under GST will be a very tough call for both the Centre and states.
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