Finally petrol and diesel are out of the ambit of GST. Also, petrol and diesel prices are set to become cheaper under GST regime. Reportedly said, the prices of petrol are in Hyderabad are about to decrease by 31.68% than the present price of Rs74.52/litre as it costs Rs 50.91 under 28% GST plus 22% compensation Cess. It would be further cheaper than under lower tax brackets. The question which is arising is that whether the states would be able to afford to lose VAT on petrol and diesels? It is expected that states would demand for compensation for loss of revenue from the Centre.

Petroleum Minister Dharmendra Pradhan also recommended that it would be better if petrol and diesel comes under GST. In this backdrop, an interesting analysis was made on prices of petrol and diesel under GST regime. The price variation in Hyderabad and Vijayawada becomes zero as it costs same in both the cities under different slabs of GST.

For instance, litre petrol in Hyderabad costs Rs74.52 as on September 13. It’ll be Rs38.01 under 2% GST, Rs40.05 under 18% GST, Rs43.44 under GST 28% and Rs 50.91 under GST28% plus 22% Cess. 

Similarly, litre petrol in Vijayawada costs Rs75.99 as on September 13. It’ll be Rs38.01 under 12% GST, Rs40.05 under 18% GST, Rs43.44 under GST 28% and Rs 50.91 under GST28% plus 22% Cess.

The Petroleum Minister said “42 per cent of excise collections are transferred to state government for infrastructure and welfare programmes. Also, many state governments have drastically increased VAT. It’s high time GST Council should consider bringing the petroleum products in the ambit of GST.”

Sources –The Hans India

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