Centre favours petroleum under GST, but states must agree: Arun Jaitley

Petroleum products are a part of the GST, but a decision to levy GST on petroleum can be taken only after the GST council takes a decision, said Jaitley.

Written by Rahul Tripathi | New Delhi | Updated: December 20, 2017 4:50:07 am
Arun Jaitley, Arun Jaitley on loan waiver for capitalists, bad loan, loan defaulters, National Company Law Tribunal, NPA defaulters Finance Minister Arun Jaitley during the press conference at Media Center in New Delhi. (Express Photo by Renuka Puri)

Union Finance Minister Arun Jaitley told Rajya Sabha Tuesday that the government was in favour of bringing petroleum products under the ambit of the Goods and Services Tax (GST) but would await consensus among states before making any such move.

Responding to TDP member Devender Goud during Question Hour, Jaitley, who is also Leader of the House, said: “The Constitution amendment, which has been passed and ratified by state assemblies, actually has not kept petroleum products out. Petroleum products are a part of the GST, but a decision to levy GST on petroleum can be taken only after the GST council takes a decision… We don’t need to amend any law if petroleum products are to be brought into GST, but only after the council takes a decision is when it will be introduced.”

Former Finance Minister and Congress member P Chidambaram said he was “not satisfied” with the government’s response. “The question really is: When will the GST council decide? When will the GST council take up this subject and what is the position of the central government, which has virtually a veto on the decision of the GST council?”

“If you go by crude oil prices of May 2014 and say in October 2017 — since then there has been a rise in crude oil prices — prices fell by 49 per cent, allowing for exchange rate variation, price of petrol and price of diesel should have come down by at least 20 per cent at the retail level. But at the end of October 2017, the price of petrol was the same as it was in May 2014 and the price of diesel was Re 1 more than in May 2014,” Chidambaram said.

Hitting back, Jaitley said, “He (Chidambaram) will recollect that when UPA was in power, they knew the limitations as far as petroleum was concerned. So, in the 115th Constitutional amendment, which was proposed, petroleum was kept completely out of GST. The UPA Constitutional amendment draft proposals presented before Parliament did not include petroleum products ever to be a part of GST itself because UPA well knew that it will be a deal-breaker between the Centre and the states if you bring in petroleum. And, therefore, you did not even make an effort. Now that you are in Opposition, you have far greater flexibility in reversing your position.”

“After a great deal of consultation, we managed to persuade all the states to agree to bring in petroleum within GST itself. But the states reluctantly agreed to do so… It will be only when the states decide and agree upon it that the council will have the power to then decide to bring petroleum into GST. As far as the central government is concerned, we are in favour of bringing it… but we would await consensus of the states. I do hope that at some stage, sooner than later, states agree,” he said.

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