The petroleum products are “constitutionally included” under the Goods and Services Tax (GST) but it is the GST Council which includes Finance Ministers of all states that would decide when petrol, diesel etc can be brought under its regime, parliament was told on Wednesday.
In a reply to Rajya Sabha, Petroleum and Natural Gas Minister Dharmendra Pradhan said: “Article 279A (5) of the Constitution provides that GST Council shall recommend the date on which goods and services tax shall be levied on petroleum crude, high-speed diesel, motor spirit, natural gas and aviation turbine fuel.
“Thus, while petroleum products are constitutionally included under GST, the date on which GST shall be levied on such goods shall be as per the decision of the GST Council, which has a representation of Ministers-in-charge of finance or taxation of all states and Union Territories with the legislature.”
Of the rising petrol and diesel prices, Pradhan pointed out that the petrol and diesel prices have been made market determined by the government effective from June 26, 2010 and October 19, 2014 respectively.
“Since then the public sector Oil Marketing Companies (OMCs) take appropriate decisions on pricing of petrol and diesel in line with international products prices and other market conditions,” he said.
The Minister said that to give consumers some relief, the Central government has already reduced the central excise duty on petrol and diesel by Rs 2 per litre effective from October 4, 2017, and has also requested the state governments to reduce VAT imposed by them on petrol and diesel to give further relief to the consumers.
“Accordingly, five state governments and one Union Territory have reduced the VAT on petrol and diesel,” he said.