Finance Minister Nirmala Sitharaman has said there is no proposal as of now to bring crude oil, petrol, diesel, jet fuel (ATF) and natural gas under the Goods and Services Tax (GST).
When the GST was introduced on July 1, 2017, merging over a dozen central and state levies, the commodities such a crude oil, natural gas, petrol, diesel, and jet fuels - were kept out of its purview given the revenue dependence of the central and state governments on this sector.
"The council may consider the issue of inclusion of these five petroleum products at a time it considers appropriate keeping in view all the relevant factors including revenue implication."
These five things were left out of the GST's purview when it was implemented in 2017 due to the central and state government's reliance on the petroleum sector for revenue. This suggested that the government could tax these goods and the state could impose a Value-Added Tax on them.
Currently, the national govt imposes a single rate of excise tax, while states enact differing rates of VAT. The two will be merged under the GST, bringing uniformity and resolving the issue of higher fuel prices in some states due to higher VAT.
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