Oil Min optimistic about oil being brought under GST purview

Union oil minister Dharmendra Pradhan has voiced optimism that petroleum products will be brought under the GST purview that will help in checking volatility in fuel prices.

“In the long run, petroleum products are bound to be included within the ambit of the GST regime … It is only a matter of time. It will immensely help in containing prices of petrol and diesel,” Pradhan told reporters in Bhubanewswar.

He, however, declined to specify any timeline on bringing petroleum products under the Goods and Services Tax (GST). The states, he said, appear to be unwilling to include petro items within the GST ambit as they are deriving major financial benefits in the existing arrangement.

The inclusion of petrol and diesel in the GST regime would bring uniformity in taxation, he said, adding the GST council is working in this direction.

Taxes are one of the main factors behind rising fuel prices in the country, he said, adding bringing petroleum products under the GST regime can be a long-term measure to tackle the problem and the Centre is working out a holistic strategy to address it.

Among the several factors behind the fuel price rise are high international crude price, geo-politics of oil, fluctuation in dollar and Indian currency exchange rate and local taxes. However, the Centre is determined to not allow petrol and diesel prices go out of the reach of the common man and is working to provide a holistic solution to price volatility without going back on reforms.

To a query, the petroleum minister said the Centre was not in favour of partial rollback of fuel price deregulation as it will not withdraw pro-reform measures.

Pradhan said taxes on petrol and diesel are made up of excise duty charged by the Centre and VAT levied by state governments. Taxes charged by the states should be “reasonable” and some states have cut VAT after reduction of excise duty by the central government in October last year, he added.