Daijiworld Media Network
New Delhi, Sep 15: With petroleum prices having touched the three year high, Petroleum Minister Dharmendra Pradhan has in a tweet said, "The Petroleum products' inclusion in Goods and Services Tax (GST) only way for rational fuel prices".
If Finance Minister Arun Jaitlely-headed GST Council takes Pradhan’s suggestion, petrol prices under 12 per cent GST bracket would be as cheap as Rs 38.1 in Delhi as against the current Rs 70.38. If government opts for 18 per cent, petrol price will come down at Rs 40.05 a litre. If the government pushes petrol to highest GST tax bracket of 28 per cent, then it will cost Rs 43.44 per litre in the national capital.
Similarly, if government brings diesel prices under 12 per cent GST bracket, then it will be sold at Rs 36.65 in Delhi. At 18 per cent GST, diesel will cost Rs 38.61 while at 28 per cent GST, it will cost Rs 48.88.
Currently, petroleum products are still governed by VAT system. Different states have different rates of VAT applicable on petroleum products.
The government had between November 2014 and January 2016 raised excise duty on petrol and diesel on nine occasions to take away gains arising from plummeting international oil prices. In all, duty on petrol was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre.
It was August 2014, when petrol prices breached Rs 70 mark the last time. Back then the crude oil prices was around USD 98 per barrel. But, now the crude oil prices are hovering around USD 50 per barrel.
According to data released by the Indian Oil Corporation, fuel costs only Rs 26.65 at the refineries, which it later sold to dealers at Rs 29.96. The dealer charges Rs 3.24 as commission. That makes the total cost of fuel Rs 33.20. However, the data showed that government levied excise duty of Rs 21.48 and VAT Rs 14.76 which made the total price of petrol for consumers Rs 69.43 in Delhi on September 2.
The decision to bring petroleum products under the new taxation regime can only be taken by the GST Council. However, the council has heavy representation from states. If GST council does include petroleum in GST brackets, then they could be at loggerheads with the state government.