New Delhi: On Friday, September 15, the Goods and Services Tax (GST) Council will convene in Lucknow. Among other things, the council is likely to discuss bringing fuel prices under the purview of GST taxation. If this occurs, the prices of gasoline and diesel may fall precipitously, providing significant relief to the common man who has been subjected to high fuel prices in recent years.
According to economists at the State Bank of India (SBI), if petrol is brought under the purview of the GST, the price could reach Rs 75 per liter. Simultaneously, if GST is levied on diesel, it could be priced as low as Rs 68 per liter.
According to economists, the total loss of bringing petrol and diesel prices under GST will be around Rs 1 lakh crore, or 0.4 percent of GDP, assuming global crude prices of $ 60 per barrel and an exchange rate of 73 per dollar.
“The Centre and states are hesitant to include crude oil products in the GST regime because sales tax/VAT (value-added tax) on petroleum products is a significant source of revenue for them.” As a result, there is a lack of political will to bring crude under the purview of GST, according to economists.
Economists, on the other hand, are skeptical of any such move by the GST Council. They claim that there is a “lack of political will” that is keeping Indian oil product prices among the highest in the world.
Petrol and diesel are currently priced at Rs 101.19 and Rs 88.62 per liter in the national capital, Delhi. The central government currently levies taxes equal to 32% of the price of gasoline, while state taxes vary by state.
In comparison, the estimated GST-led prices of gasoline and diesel are significantly lower. In accordance with the directions of the Kerala High Court’s June order, the GST Council will now discuss the matter on September 17.