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Gujarat Dy CM: Fuel under GST if Centre ensures VAT income of state remains untouched

Deputy Chief Minister Nitin Patel said that if the income under VAT is included in GST, then Centre will become a 50 per cent partner and it will take away the state's profits for no reason.

Written by Avinash Nair | Gandhinagar |
March 31, 2021 10:52:11 am
Gujarat Assembly, Nitin Patel, Gujarat assembly passes bills, Gujarat assembly passes three bills, indian express newsDeputy Chief Minister Nitin Patel.

Gujarat will agree to include petrol, diesel and natural gas under Goods and Services Tax (GST), only if the Government of India (GoI) evolves a mechanism to ensure the state’s income from Value Added Tax (VAT) remains untouched, Deputy Chief Minister Nitin Patel told the state Assembly on Tuesday.

“The income from VAT, which comes largely by selling petrol, diesel and (CNG & PNG) gas, belongs 100 per cent to the Gujarat government. We do not have to give a single rupee to the Centre… If this income is included in GST, then Centre will become a 50 per cent partner and it will take away our profits for no reason,” Patel said on the last day of discussions on budgetary demands.

“I am not ready for this (to include petrol, diesel and gas under GST) as a finance minister. But in the interest of the nation, all the finance ministers have requested in the GST Council that the Government of India makes a formula or mechanism where income from VAT will continue as it is, despite fuel being included in GST. Only in such a scenario, the state government will agree (for fuel to be included under GST). I am the finance minister of Gujarat. The people have given us the responsibility and we have to maintain the trust,” Patel said. The DyCM also asked the Congress not to make such demands in the future.

“No state is ready for this. You can ask your government in Rajasthan and Chhattisgarh if they are ready to include fuel in GST,” Patel told the Congress members.

The deputy chief minister also touched upon the prices of petrol and diesel prevailing in the state. He said Gujarat is ranked 19th on the list of states if the price of petrol is considered. “The price of petrol in Gujarat is less than Rajasthan and Maharashtra. We have already reduced VAT twice. The retail price of petrol in Gujarat is Rs 88.30 per litre, while in Congress-run Rajasthan, it is Rs 97.56. So, compared to us, the Congress government in Rajasthan is charging Rs 9 more,” Patel said. He added that price of petrol in Maharashtra is Rs 97.19.

At the beginning of the budget session, Congress MLA Gulabsinh Rajput had cycled to the Gujarat Assembly demanding the government to scale down the fuel prices in the state. In June last year, the state government had increased the VAT rates by almost four per cent.
Responding to the Congress legislators’ jibe on the Gujarat government for their “focus on organising festivals”, Patel said: “They (Congress) criticised Rannotsav saying that our expenditure is useless… The area where Rannotsav is held, 80 per cent of the population is Muslim. These people, who were struggling to earn a living, have flourished with the business that came in due to this festival organised in the winters. Lakhs of tourists go there now. Foreign tourists interested in staying in a “bhunga” (mud huts of Kutch) now come here.” Patel said a similar transformation was happening for the tribals living near the Statue of Unity at Kevadiya.

Earlier, during the discussions, Congress MLAs had also criticised the government for the rising public debt and the non-development expenditure.

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