The Goods and Services Tax (GST) was introduced in India from July 1, 2017 which subsumed all indirect taxes levied by the central and state governments. However, petroleum products such as petrol, diesel, jet fuel and natural gas were kept out of the purview of GST in order to preserve the revenue acquired by the states.
The only change that had happened was daily revision of petrol and diesel prices insted of every fortnight. As per government, this was done to immediately passes on the benefit of any reduction in international oil prices to consumers and avoids sharp spikes by spreading them in small doses. But there has been a spike of Rs 7.3 per litre in petrol and diesel price since GST rollout in July.
The petrol prices have increased by Rs 7.32 to reach Rs 70.38 a litre in Delhi, the highest since August 2014, and the diesel rates have risen by Rs 5.36 to Rs 58.72.
Oil Minister Dharmendra Pradhan on September 13, 2017, ruled out any tax cut in petrol and diesel prices to soften the blow of relentless rise in prices since July 3, citing the government need to finance huge infrastructure and social projects has to be balanced with consumer needs. He also said that, “It is high time GST Council should consider bringing the petroleum products in the ambit of GST.”
It is mentioned in the Central Goods and Services Tax act, 2017 Chapter III Levy and Collection of Tax that, “9.(2) The central tax on the supply of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel shall be levied with effect from such date as may be notified by the Government on the recommendations of the Council.”
Thus, once the fuel prices are brought under GST, the price of petrol and diesel would become uniform across the country.