Chief Economic Advisor K V Subramanian has backed a proposal to bring petroleum products under the ambit of the Goods and Services Tax (GST).
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Kerosene, liquefied petroleum gas including domestic cooking gas, naphtha, and furnace oil are covered under the GST.
Several other products such as crude oil, aviation turbine fuel, petrol, diesel, and natural gas continue to remain outside the purview of GST.
According to official statements union government is half way to bring petrol and diesel products under GST.
Bringing petrol and diesel products under the GST poses no legislative hurdle as it just requires the GST Council’s nod. It will address the problem of varying fuel prices and ensure similar petroleum across the nation.
Customers can claim their Input tax credit for the petrol and diesel. It will reduce the cascading of taxes on intermediate products. Maintaining the GST value chain will also provide significant efficiency gains.
