Bringing petrol and diesel under the ambit of the Goods and Services Tax (GST) could reduce the prices of the two petroleum products by around Rs 29 in Mumbai, experts suggest, according to a report by The Times of India.

The report cites experts and dealers as saying that if fuel is brought under the GST regime, at a rate of even 40 percent, the price of petrol will go down by Rs 29 while diesel could go down by Rs 14. Moneycontrol could not independently verify the report.

While the international crude prices have dropped, people in India are paying higher prices because of a progressive increase in taxes. While the Centre has increased excise duty by Rs 10 per litre, in Maharashtra, VAT and surcharge increased by Rs 6.97 per litre.

While its basic price for the oil companies fell by Rs 5.52 per litre in four years, people in Mumbai are paying a retail price of Rs 6.33 per litre more, the report claims.

Central excise duty on diesel has increased by Rs 11.77 per litre while VAT and surcharge has increased by Rs 1.84 per litre in the last four years.

Petroleum pricing expert and fuel dealer Kedar Chandak told the newspaper, “If the prime minister and states’ chief ministers decide to give up a certain amount of taxes to extend relief to consumers and transporters, they can replace the existing multi-layered transport fuel tax structure with GST.”

“It is all the more tempting for governments to do so because it is an easy way to fill state coffers,” a transport expert said, according to the report.

Petrol and diesel prices continue to soar and touched another peak on Friday. Petrol was hiked by 36 paise to Rs 85.65 per litre in Mumbai.

This is the 12^th straight hike in a row. Diesel prices on the other hand, were hiked by 24 paise to Rs 73.20 per litre in Mumbai. Petrol prices in Delhi were increased by 36 paise to Rs 77.83 per litre and diesel by 22 paise to Rs 68.75 per litre.

Petrol prices have risen by Rs 11.02 while diesel has risen by Rs 7.27 in the past 12 days in Mumbai.

Petroleum Minister Dharmendra Pradhan had earlier said that the government will intervene to reduce prices while his colleague Nitin Gadkari said that subsidising petrol and diesel to bring down their retail prices will take money away from government’s social welfare schemes.

 

Source: Moneycontrol

 

We have launched Single Platform on GST Compliances In India, assisting in 4 areas – 1) Migration, 2) GST Compliance, 3) Training and 4) Transition & Implementation. Click this link for any assistance.