What happens if petrol, diesel prices come under GST?
Posted on: 15/Sep/2017 11:55:25 AM
The prices of petrol and diesel have touched a new peak. With this development, most people observe and expect that if petrol and diesel are also brought under the GST system, the price may reduce by 50% and hence, the central government should analyse and explore this aspect and take a quick decision.
The prices of petrol and diesel have touched an unprecedented high since the last 3 years. So, the central minister of Petroleum, Dharmendra Pradhan, in his twitter page, has registered that the central government is deeply concerned about this and he would propose to the central finance ministry to bring petrol and diesel also under the GST system.
GST (Goods and Services Tax) has been implemented under the main objective of a single taxing system throughout the country and the taxes most items have been brought under the GST system. It is to be noted that the prices of many essential items have come down because of this. Naturally, the public has welcomed this and GST has become hugely popular.
The central government had permitted the oil corporations to revise the prices of petrol and diesel daily based on the fluctuations of crude oil in the international market. So, the prices of petrol and diesel are being revised on a daily basis.
The price of crude oil was 114$ per barrel a few years ago. At that time, the petrol price in India was Rs. 72 per litre. However, the price of crude oil per barrel has now come down to 54$. On the contrary, the price of petrol in Mumbai is sold at Rs. 80 per litre now. This trend has shocked the public.
Further, the prices of petrol and diesel vary from one city to another. So, the price of petrol/diesel in a city is determined by the VAT prevailing in that state. In Delhi, VAT for petrol is 27% whereas, in Mumbai, it is 47.64%.
In case petrol and diesel are also brought under the GST system, in Delhi, petrol will cost Rs. 38 per litre based on 12% GST (Rs. 32 less the current price). If the GST is fixed at 18%, petrol will cost Rs. 40.05. Even in the case, GST is taken at 28%, the price of petrol will be Rs. 43.44 per litres (lesser than the present price still).
So, in case the central government makes a quick favourable decision in this regard, there are strong prospects of the prices of petrol and diesel coming down considerably.
