Centre open to bringing fuel under GST

New Delhi, May 25 (IANS) With petrol and diesel rates rising daily, the Central government on Friday advocated bringing transport fuel under the GST to curb the price hike.

While Road Transport and Highways Minister Nitin Gadkari said that bringing petrol and diesel under the Goods and Services Tax (GST) will benefit the states, Finance Minister Piyush Goyal said if the GST Council decides to go for it, the Centre will welcome the move.

"Petrol and diesel should have been brought under the GST. I asked officials during a presentation if we bring fuel prices under GST will it benefit the states or not. They said 'yes', they will benefit," Gadkari said at a news conclave here on the four years of the Modi government.

Finance Minister Goyal said the government was concerned about the rise in fuel prices and the issue of bringing it under the ambit of GST had repeatedly come under discussion.

"There will be more discussion on the issue during the next GST Council meet. All decisions are taken with consensus among all states.

"If the Council decides to bring petrol and diesel under GST, the (Central) government will welcome it," Goyal said at the India News conclave.

He added that the government was also formulating a long-term comprehensive policy to address the issue of fuel prices.

The government was thinking of a policy which addresses the issue from the consumer point of view -- wherein they don't have to pay really high price for the fuel -- while also ensuring that government revenue from taxes on petrol and diesel does not shrink, Goyal said.

"We want a balance between the two since revenue from the tax funds various government welfare initiatives," he said.

"So the solution should ensure that development programmes continue while the consumer is also protected from the excessive burden due to high fuel prices," the Minister added.

Earlier, Gadkari said that states were wary of losing revenue on account of taxes they collect from fuel prices and liquor.

"It will be good if fuel prices are brought under GST. This will not only reduce the fuel prices but will also increase the government's revenue."

He, however, said it was his personal opinion and the ultimate decision regarding this remained with the Petroleum Ministry.

The Minister said fuel prices were surging because of international crude oil rate.

"Earlier, we were giving subsidy on the import (of fuels). When the rates came down, the subsidy was removed. We are part of a global economy... The price of petrol and diesel are increasing due to rise of their price in international rates."

He said the money that was saved from removing subsidy on fuel allowed the government to give free LPG connections to eight crore families across India.

Petrol prices across the four metros increased by over Rs 3 per litre in 12 days after dynamic pricing system was resumed on May 14.

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