India

Big news मोदी Modi government likely to take important decision on September 17; Petrol price to be halved?

As petrol and diesel prices continue to rise, the general public is expected to get a big relief soon. The central government may decide to bring petrol and diesel under the Goods and Services Tax (GST). Regarding GST, a ministerial level committee may consider imposing a uniform tax on petroleum products under the One Nation One Rate policy. This will pave the way for a major overhaul of the existing system of revenue, the amount to be paid to the users and the revenue going to the government coffers. According to sources, a committee headed by Finance Minister Nirmala Sitharaman will discuss the proposal to bring petrol-diesel under GST on September 17, 2021. Given the current tax structure and the GST tax structure, even if fuel is brought under GST with the highest GST, petrol rates will be reduced by almost half.

If any change is to be made under the GST system, it needs to be approved by three-fourths of the members of the planning committee. It includes representatives from all states and territories. Some have refused to include fuel in the GST system. Maharashtra, however, needs to bring down the rates of petrol and diesel in the 2021-22 budget under the Goods and Services Tax Act and the central government has announced that it will support such a proposal. The announcement was made on March 10 by Deputy Chief Minister and Finance Minister Ajit Pawar while replying to a discussion on the budget. Some states have expressed fears that if fuel also comes under GST, a source of revenue for the states will go to the central government. Earlier, during a hearing, the court also advised to consider bringing petrol-diesel under GST. At present, there is talk of bringing fuel-related items under GST, but no official information has been released by the finance ministry or its spokesperson. However, CNBC TV 18 has reported that the government is thinking about this.

If petrol comes under GST

If petroleum products are brought under GST, fuel prices will be the same in all the states in the country. Not only that, if the GST Council places petroleum products in the lower slab, fuel prices will fall sharply. There are currently four types of GST levied in India. There are four types, at least five per cent, 12 per cent, 18 per cent and 28 per cent. At present, the central and state governments are levying 100 per cent tax on fuel in the name of taxes. Therefore, even if the highest GST is imposed, the price of petrol is expected to remain below Rs 60 per liter. At present, petrol and diesel are subject to excise duty by the Central Government and VAT by the State Government. The burden of both taxes is so high that petrol of Rs 35 has gone up to Rs 95 to Rs 115 per liter in different states. GST has been implemented from July 1, 2017. At the same time, the state government was more dependent on petrol and diesel in the form of taxes, so fuel was excluded from GST. A few months back, Sitharaman had called on the Center and state governments to come together to reduce fuel prices.

The highest earning medium

Petroleum products are the main source of tax collection and revenue for the states. That is why the GST Council can put fuel in the largest slab and levy cess on it. According to government data, in the first six months of the current financial year, the petroleum sector has contributed Rs 2,37,338 crore to the exchequer. Out of this, one lakh 53 thousand 281 crore was the share of the Center and 84 thousand 57 crore was the share of the states. In the year 2019-20, the state and the center got a total of five lakh 55 thousand 370 crores from the petroleum sector. This is 18 per cent of government revenue and seven per cent of state revenue.

Highest tax in Rajasthan

Rajasthan has the highest VAT on petrol at 36 per cent. After that, Telangana charges 35.2 per cent VAT. The states that charge more than 30 per cent VAT on petrol include Karnataka, Kerala, Assam, Andhra Pradesh, Delhi and Madhya Pradesh. The highest taxpayers on diesel are Odisha, Telangana, Rajasthan and Chhattisgarh. Recently, West Bengal, Rajasthan, Meghalaya, Assam and Nagaland cut fuel taxes.

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