In New Delhi, discussions are ongoing regarding the inclusion of petrol and diesel in the Goods and Services Tax (GST). Sanjay Kumar Agarwal, Chairman of the Central Board of Indirect Taxes and Customs (CBIC), stated that it may not be feasible to incorporate these fuels into the indirect tax system at this time. When asked about the potential for including petrol and diesel under GST, Agarwal explained that these fuels currently incur central excise duty and value-added tax (VAT), which generate significant revenue for both state and central governments. He mentioned that due to these revenue considerations, it is unlikely that the inclusion of petrol and diesel in GST will occur soon.
Agarwal’s remarks followed Finance Minister Nirmala Sitharaman’s previous statement that the central government had deliberately excluded these fuels from the GST Council proposal. She remarked, “Legally, we are ready, but this decision must come from the states.” Sitharaman recalled that petrol and diesel were anticipated to be addressed even during the initial implementation of GST, as discussed by her late predecessor, Arun Jaitley. The Finance Minister emphasized that once the states reach an agreement, they will need to determine the tax rate within the council, after which it will be legislated. Since the GST was established in July 2017, petrol, diesel, and alcoholic beverages have remained outside its purview.