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No GST on Petrol and Petroleum Products

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No GST on Petrol and Petroleum Products

As on date, there will be no levy of GST on Petrol and other petroleum products. Chief Economic Advisor Mr. Arvind Subramanian, on this Sunday, stated that Petrol and other petroleum product shall be outside the ambit of Goods And Services Tax (GST) regime after its roll out.
At the same time it must be noted that constitutionally petrol and other petroleum products will be within the GST system only. But, for time being it would be outside the GST.
It is pertinent to not that for the proper implementation of GST and microeconomics related thereto, the inclusion and levy of GST is a must. Because, a major chunk of collection of taxes by State as well as Centre and inflation is governed by such products even RNR (Revenue Neutral Rate) is very much effected by such products.
Though, no GST will be on Petrol & Petroleum products, but whether we know the cost of non inclusion of such products, even for time being, on micro economy of implementation of GST in India.
For five reasons, the inclusion of Petrol and other petroleum products in GST is must:
a. Uniform taxation and abolition of other indirect taxation
b. Lower Revenue Neutral Rate (RNR)
c. To check inflation which will be there after implementation of GST in India
d. To complete the chain and extend real benefit of GST
e. To boost the GDP by 2%
Let’s hope that Petrol and other petroleum products are included at an early date so that GST can be implemented in its wider perspective.
The real intention of GST is to minimise the cascading effect created by multiple taxes in the existing system and if exceptions are carved out then it will drastically effect the true spirit of GST reforms cum regime in India.

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