[IamNikhil]

This talk of fuel being considered for inclusion in the GST regime has been on for a long long long time now! Considering that any changes in the GST structure require 3/4th approval of the council and the current political scenario in the country, expect fireworks in the GST Council meeting of Finance Ministers.

Also, even if the govt ultimately manages to get fuel under GST, there is no bar on various cess components being levied over and above anyway. No government, whether at the Centre or State level will willingly forego this easy source of mopping up revenue.

We may crib and cry, but ultimately have no option but to fill our tanks with fuel costing 100+ atleast in the foreseeable future.

[saket77]

If the intention of the Govt was to lower the fuel prices and give relief to common man, then they would have done it without such GST council meet 'formalities' which is actually a hogwash, at least for fuel price consideration under GST. Even if they bring it under GST regime, please do not expect any reasonable relief. May be 3-5 rupees at the max...thank UP election for that.

[ABHI_1512]

No state government will agree to fuels being taken under GST. As it is, the Central government is delaying share of GST payments to the states, giving the complete control of revenues will mean letting go of the two avenues of money- Fuel and Alcohol and depending on the central government.

If someone walks the talk and reduces the duties, specially the last special duty under the guise of excise, we would have reduced prices for sure but who would want that to happen, not the current authorities at least who have messed up the economy so bad that they have to tax the ordinary citizens through fuel taxes to mop up money !!

[IamNikhil]

Originally Posted by ABHI_1512

If someone walks the talk and reduces the duties, specially the last special duty under the guise of excise, we would have reduced prices for sure but who would want that to happen, not the current authorities at least who have messed up the economy so bad that they have to tax the ordinary citizens through fuel taxes to mop up money !!

The blame doesn't lie only on the "current authorities". It is to be apportioned to all political parties, irrespective of whether they were in power at the Centre or State level. Fuel has always been an easy target for fleecing citizens, for all governments for many years now. We have to bear the brunt.

[ABHI_1512]

Originally Posted by IamNikhil

The blame doesn't lie only on the "current authorities". It is to be apportioned to all political parties, irrespective of whether they were in power at the Centre or State level. Fuel has always been an easy target for fleecing citizens, for all governments for many years now. We have to bear the brunt.

I am not into one party or the other party guilty game. It’s a fact that we never got the benefit of deregulated prices till date. And I will continue to blame the current authorities for the abnormal fuel prices since the major part of taxes go to the central kitty. The last major hike under the late finance minister was a major factor in fuel prices going north. Even when the global crude prices were at abysmal low, we continued to pay higher prices !!

The states are to be blamed too but they cannot be expected to let go of only the two revenue options that they have. Some states have in fact reduced their VAT component resulting in decreased prices. But yes, I agree with you that as much as we crib, prices will stay the way they are, no matter what.

[AutoNoob]

Centre trying to bring petrol, diesel under GST; will oppose any move to curb states’ right to taxation: Ajit Pawar

Source : Indian Express

“Although nobody is speaking in public, there is a serious move on part of the Centre to bring petrol and diesel under GST citing one nation, one tax regime. While the centre has the right to evolve its own rules, any policy decision that adversely affects state revenue is not acceptable. In the name of the uniform tax regime, if states’ right to taxation are curbed it will be opposed tooth and nail,” said Pawar ahead of the GST Council meeting scheduled to be held in Lucknow on Friday.

“Under the GST compensation, Centre owes Maharashtra Rs 30,000-32,000 crore. They have still not given us our rightful dues.”

“After GST came into effect, states’ revenue generation avenues have been limited. Apart from stamp duty registration and value added tax on petrol and diesel, there is not much scope for raising revenue. Added to this, the amount from the centre under GST compensations is still pending,” said Pawar.

Hence, the cat and mouse game begins.

[IamNikhil]

More than these state ministers being "concerned" about the financial aspect of the decision, it simply boils down to politics. All politicians have the gall to reward themselves with hefty paychecks regularly and find the right amount of funds for that...but when it comes to caring two hoots about the taxpayers, "tijori khaali hai!"

[volkman10]

Petrol, diesel to continue to be highly taxed, will not come under GST.

given that the fuels generate massive revenue in the form of taxes for both the Central and state governments and neither is willing to reduce their share.

If motorists in India were expecting any reduction in fossil fuel prices, then they should be resigned to keep waiting and continue to pay wallet-busting prices. Given the market buzz that petrol and diesel fuel, along with natural gas and aviation fuel, could be brought under the purview of the Goods & Service Tax (GST), thereby enabling price reduction, this will not be the case.

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[ABHI_1512]

^^ The above break up of fuel prices in Delhi tells you how the central taxes have made the mockery of deregulated prices. For folks who think states are the ones who oppose GST for the sake of it, no one wants to let go off the cash cow, be it anyone. However, please note the share of taxes for both petrol and diesel.

While the excise duties remain almost same for both petrol and diesel, it’s the diesel which attracts less VAT than petrol in Delhi. The price difference remains more than ₹10 and should help the commercial sector. Many states have reduced the VAT component to at least provide some respite but the same cannot be said about the excise part. Meanwhile, we continue to pay higher prices in which the tax component is actually more than the product itself- almost a diamond-water paradox !!

[carboy]

Originally Posted by ABHI_1512

the same cannot be said about the excise part.

The excise has been continuously increased for many years now. And though there is a mistaken idea that the excise is properly split between the center & the state, the reality is very different. The excise consists of 2 parts - the divisible pool & the indivisible pool. Only the divisible pool is split. Most of the excise increases have happened in the indivisible pool, so out of the 33 Rs of Central Excise on fuel, somewhere around 32 Rs goes to the center & less than 1 rupee goes to the states.

[ABHI_1512]

Originally Posted by carboy

The excise has been continuously increased for many years now. And though there is a mistaken idea that the excise is properly split between the center & the state, the reality is very different. The excise consists of 2 parts - the divisible pool & the indivisible pool. Only the divisible pool is split. Most of the excise increases have happened in the indivisible pool, so out of the 33 Rs of Central Excise on fuel, somewhere around 32 Rs goes to the center & less than 1 rupee goes to the states.

Exactly, but few know of this hidden fact. In fact the last major hike (₹13 for diesel and ₹10 for petrol) was surreptitiously done under special excise duty and road cess head for which the entire hike went to the central kitty and less than a rupee went to the states. This is one of the main reason why the states are reluctant to agree to GST regime. The thing is, center-state relations are now at abysmal low and we the people are boring the brunt of it !!

A little reduction in the road cess or special excise duty slab would have gone a long way in helping people who are already hammered by the pandemic but then who cares as long as money is coming in

[wildsdi5530]

But bringing Fuel under GST even with all the presumed cess and other hidden taxes, will reduce the center's share and increase the state share. Because the GST is evenly split between CGST and SGST.

So why does the center want GST and the states oppose GST? I'm never able to understand the way our benevolent rulers think.

[SLK]

Originally Posted by wildsdi5530

But bringing Fuel under GST even with all the presumed cess and other hidden taxes, will reduce the center's share and increase the state share. Because the GST is evenly split between CGST and SGST.

It may not be that simple. GST is a value added tax that means only value creation gets taxed and you get credit for all input costs. So states with refineries will earn, but everything else will be close to zero, I.e. only limited to margins.

PS: I'm no expert at this.

[wildsdi5530]

Originally Posted by SLK

It may not be that simple. GST is a value added tax that means only value creation gets taxed and you get credit for all input costs.

Originally Posted by wildsdi5530

There are many items where GST input credit is not eligible -
Motor Vehicles or Conveyances.
Food, Beverages and Outdoor Catering.
Beauty Treatment, Health Services & Cosmetic and Plastic Surgery
Life and Health Insurance
Travel Benefits for Employees.
Works Contract Services
Construction of Immovable Property
Personal consumption
Lost/ stolen/damaged goods
Composition supply.

For sure you cannot claim input credit on Fuel.

[volkman10]

Politics to the core:

Petrol prices not coming down as states don't want it under GST: Minister


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