Gasoline and diesel prices may soon cool down. Plenty of information on this topic has been released by the Central government. In a Monday press conference, Petroleum and Natural Gas Minister Hardeep Singh Puri said that the Central government is prepared to include petrol and diesel in the Goods and Services Tax (GST), but that there is little likelihood of the states agreeing to this. Puri added that in order to include petrol and diesel under the GST, the state governments' approval is required. If the state governments provide their approval, the Central government will follow suit.
From the minister's remarks, it is evident that the central government is leaving the states to handle the situation alone. That is, if the state governments agree, then petrol and diesel may fall within the ambit of GST which can reduce its growing price.
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According to Union Minister Hardeep Singh Puri, “We have already prepared for this. This is my understanding. The second issue, however, is the way it is implemented. That question should be raised with the Finance Minister. There is little possibility of agreeing on this among the states. The main source of income of the states is the tax on liquor and petroleum products.”
Hardeep Puri added, “It is not difficult to understand that states get revenue from these. Why would the revenue earner want to leave it? Only the central government is concerned about inflation and other things. Referring to the decision of the Kerala High Court, he said that it was suggested to take up the matter in the GST Council, but the finance ministers of the states did not agree on it. As far as GST is concerned, our or your wishes are in place, we are part of a cooperative federal system.”
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It is vital to note that one of the main arguments against include petrol and diesel in GST is the income loss to the states. States would still lose a lot of money if they include petrol and diesel in the GST and keep them both in the highest GST tax bracket. This is why certain states are hesitant to include petrol and diesel in the Goods and Services Tax (GST).
On the reduction in the prices of petrol and diesel, Hardeep Puri said, “I am surprised by your question. The least increase in their prices in the last year has probably happened in India itself. Morgan Stanley is also saying that India has been in one of the best positions in the world. He said that India has protected itself from the impact of rising crude oil prices by taking steps like cutting excise duty. He said, I do not answer hypothetical questions, but the effort of the central government will be to keep the prices stable.”
