BJP chief Sushil Kumar Modi on Wednesday mentioned it isn’t possible to bring petrol and diesel under the GST regime for the next eight to 10 years as it will trigger an annual income lack of Rs 2 lakh crore to all states.
Centre and states collectively accumulate over Rs 5 lakh crore tax on petroleum merchandise, Modi advised the Rajya Sabha whereas collaborating in a dialogue on the Finance Bill 2021.
The assertion assumes significance in view of the rise in petrol value for the previous over one yr which even touched Rs 100 per litre in some states.
In the primary discount in charges in over a yr, petrol value on Wednesday was minimize by 18 paise per litre and diesel by 17 paise a litre as worldwide oil costs tumbled to the bottom since early February.
Petrol value was minimize to Rs 90.99 a litre in Delhi from Rs 91.17 per litre. Diesel now comes for Rs 81.30 a litre within the nationwide capital, down from Rs 81.47 beforehand.
Rates have been diminished throughout the nation and range from state-to-state relying on the native incidence of taxation (VAT). This is the primary discount in gasoline costs in over a yr. The costs had been final diminished on March 16, 2020.
“It is not possible to bring petrol and diesel under GST regime in the next eight to 10 years because states would not be ready for an annual revenue loss of Rs 2 lakh crore (collectively by all states),” Modi advised the House.
“If petrol or diesel would be brought under the Goods and Services Tax (GST) regime then how would the loss of Rs 2 lakh crore revenue to states be recovered. The Centre and states together earn over Rs 5 lakh crore from tax on petroleum products,” he mentioned.
He defined that if petroleum merchandise are introduced under the GST, 28 per cent tax could be collected on them as that’s the highest slab within the tax regime.
“Presently, 60 per cent tax is being collected on petroleum products. This would result in shortfall of Rs 2 lakh crore to 2.5 lakh crore (to both Centre and states),” he defined within the House.
“If we collect 28 per cent tax on petroleum products, then only Rs 14 would be collected (per litre) against Rs 60 at present,” he identified.
“If petrol or diesel price is Rs 100 (per litre) then the tax component is Rs 60 which includes Rs 35 for Centre and Rs 25 for respective states. Besides out of the Rs 35 tax per litre, 42 per cent goes to states,” Modi added.
He additionally acknowledged,”It is claimed that tax collected on petrol, diesel goes into the pocket of presidency. There isn’t any separate pocket of presidency. From the place the cash will come for offering electrical energy and faucet water to all households. The spending of tax assortment on welfare of nation is being challenged.
Reacting to remarks towards the GST regime, he mentioned, “Some people also said that this is Gabbar Singh Tax. No state has opposed the tax structure of GST in any GST Council meeting. You can see the proceedings of the council (to verify that),” he mentioned.
He harassed that solely the federal government under the management of Prime Minister Narendra Modi had the heart to implement the GST regime within the nation.