The Goods and Services Tax (GST) is one of the biggest tax reforms in India that was implemented on July 1, 2017. However, petrol and diesel were kept outside the purview of GST and continues to be taxed by the central and state governments. In this article, we will discuss the government's plan to bring petrol and diesel under the ambit of GST, the expected GST rate, and the price comparison with the current tax structure. We will also address some frequently asked questions about GST on petrol.
The government has been considering the inclusion of petrol and diesel under GST since the implementation of the tax reform. The inclusion of these fuels under GST will streamline the tax structure and reduce the cascading effect of taxes. Currently, the central government levies an excise duty on petrol and diesel, while state governments impose a value-added tax (VAT). The inclusion of these fuels under GST will eliminate the need for multiple taxes and simplify the tax structure.
However, bringing petrol and diesel under GST is not an easy task. The GST Council, which is responsible for making decisions related to GST, has been hesitant to bring these fuels under the tax reform due to the revenue loss for the central and state governments. The tax on petrol and diesel is a significant source of revenue for both the central and state governments, and the inclusion of these fuels under GST will lead to a reduction in tax revenue.
The GST Council has not yet decided on the GST rate for petrol and diesel. However, experts suggest that the expected GST rate on these fuels will be around 28%. Currently, the total tax on petrol and diesel is around 60%, which includes excise duty, VAT, and other cess. The inclusion of these fuels under GST will reduce the tax burden on consumers, but it will also lead to a reduction in tax revenue for governments.
The inclusion of petrol and diesel under GST will lead to a reduction in the tax burden on consumers. Let's compare the current tax structure with the expected GST rate to understand the price difference. Currently, the price of petrol in Delhi is Rs. 91.17 per liter, while the price of diesel is Rs. 81.47 per liter. The total tax on petrol in Delhi is Rs. 32.90 per liter, while the tax on diesel is Rs. 31.80 per liter.
If we assume that the expected GST rate on petrol and diesel is 28%, the tax on petrol will be around Rs. 25.50 per liter, while the tax on diesel will be around Rs. 22.60 per liter. This means that the price of petrol will come down to Rs. 68.67 per liter, while the price of diesel will be Rs. 58.87 per liter.
Yes, the inclusion of petrol and diesel under GST will lead to a reduction in prices. However, the reduction in prices will depend on the GST rate decided by the GST Council.
Yes, the inclusion of petrol and diesel under GST will lead to a revenue loss for the government. The tax on petrol and diesel is a significant source of revenue for both the central and state governments.
The GST Council has not yet decided on the inclusion of petrol and diesel under GST. The decision will depend on the revenue loss and other factors.
The current tax structure on petrol and diesel includes excise duty, VAT, and other cess. The total tax on petrol and diesel is around 60%.
The GST Council has not yet decided on the GST rate for petrol and diesel. However, experts suggest that the expected GST rate on these fuels will be around 28%.
The inclusion of petrol and diesel under GST will lead to a reduction in the tax burden on consumers. However, it will also lead to a revenue loss for the central and state governments. The GST Council has not yet decided on the GST rate for these fuels, and the decision will depend on the revenue loss and other factors.
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