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Petrol, diesel to come under GST

Petrol, diesel to come under GST
The Oil and Petroleum Minister, Dharmendra Pradhan, has said that since many states had drastically increased their value-added tax, it was high time for the GST Council to contemplate bringing in the petroleum products within the ambit of GST, as the government cannot change fuel prices on a knee-jerk basis despite a heavy spike prevailing since July. Assuring the people that the government had worked out the best formula to ensure retail prices of petrol and diesel, through the daily price revision mechanism, he said that unlike the fortnightly pricing, the consumers now did not have to wait for 15 days to enjoy the benefits in case of a fall in international crude oil prices. He further claimed that despite hurricanes Irma and Harvey hitting the refinery production in Texas, USA, by as much as 13 per cent, global crude prices showed signals of easing out in the near future. It may be noted that the Indian basket of imported crude oils increased to nearly 3.5 USD per barrel last week, even as petrol prices in the country touched their highest levels during the tenure of Prime Minister Narendra Modi. After meeting the heads of oil marketing companies (OMCs) and assuring them of no intervention, they remained firm against cutting taxes to soften the impact of the sudden spate in prices.

Maintaining that only the Finance Ministry is equipped with the right to cut excise duty on petroleum products, he said that the government has to make a strict balance between the needs of development and the expectations of the consumers. With crude oil prices rising high last year, the government levied a cess on petroleum products in order to generate extra revenue for the exchequer. "We have to fund the development plans for big highways and roads, modernisation and expansion of railways, safe potable water, primary healthcare and education. As all these heads need a proper distribution of funds, we have to arrange the resources for them," he said. Notably, petroleum products do not come under the Goods and Services Tax (GST), which causes evident differences in price across different states as per their individual tax provisions. "GST is the only way to put a check on varying prices of petroleum products prevalent in different states. Even Finance Minister Arun Jaitley, who is also the chairman of the GST Council, has been interested in bringing the petroleum products under the GST bracket," he added.

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