Not possible to bring crude oil under GST for 8-10 years: Sushil Modi
BJP MP Sushil Kumar Modi on Wednesday said that it is not possible to bring petrol and diesel under the GST regime for the next eight to 10 years as it would trigger an annual revenue loss of ₹2 lakh crore to all states.
“If petrol or diesel would be brought under the Goods and Services Tax (GST) regime then how would the loss of ₹2 lakh crore revenue to states be recovered. The Centre and states together earn over ₹5 lakh crore from tax on petroleum products,” Modi told the Rajya Sabha.
Modi’s statement comes amid a steady rise in petrol prices over the past one year with the cost per litre going up to ₹100 in some states. In a temporary relief, the country on Wednesday saw petrol prices getting slashed by 18 paise per litre and diesel by 17 paise per litre, due to a tumble in international oil prices.
Related news: Are previous governments to blame for rise in petrol prices – as Modi govt said?
While the rate of petrol was reduced to ₹90.99 per litre in Delhi against an earlier ₹91.17 per litre, diesel was reduced from ₹81.47 per litre to ₹81.30. This is the first reduction of fuel prices since March 16, 2020.
Modi said, if included under GST, a tax of 28 per cent, the highest slab in the tax regime, would be levied on petroleum products. Stating that currently a tax of 60 per cent is being collected on petroleum products, Modi said if GST is levied, it would result in a shortfall of ₹2 lakh crore to ₹2.5 lakh crore to both the Centre and the state.
“If we collect 28% tax on petroleum products, then only ₹14 would be collected (per litre) against ₹60 at present,” he told the House.
“It is said that tax collected on petrol, diesel goes into the pocket of government. There is no separate pocket of government. From where the money will come for providing electricity and tap water to all households. The spending of tax collection on welfare of country is being challenged,” Modi said.
His statement comes a day after Union Finance Minister Nirmala Sitharaman expressed her willingness to discuss the suggestion of bringing petrol and diesel under the GST regime at the next council meeting.
The recent spike in COVID-19 cases and re-imposition of lockdown in several countries has led to a fall of global crude oil rates.
While Wednesday’s dip in prices isn’t enough compared to the spike in prices the country witnessed last year, it is speculated that oil marketing companies may slash rates if global oil prices go down further.
Related news: Why petrol, diesel prices are high? Petroleum minister Dharmendra Pradhan explains
