The Goods and Services Tax (GST) Council has decided not to bring petrol and diesel under the ambit of GST as it believes it is not the right time, Union Finance Minister Nirmala Sitharaman announced on Friday.
“GST Council members made it clear they do not want petroleum products to be included under GST. It was decided, we will report to Kerala High Court that the matter has been discussed and Council felt it was not the time to bring petroleum products under GST,” the Finance Minister said while addressing the media after the 45th GST Council meeting held in Lucknow.
Sitharaman clarified that the matter was on agenda purely because of a Kerala High Court order where it suggested the matter to be placed before the Council.
The high court had on June 21 asked the GST Council to consider a representation that seeks to bring petrol and diesel under the GST regime, and take an appropriate decision in six weeks.
Divakar Vijayasarathy, Founder & Managing Partner, DVS Advisors LLP said the outcome of the meeting is on expected lines without any major surprises. “The fact that states are not going to accept bringing in petrol and diesel under GST was on expected lines, given the fact that VAT on these products is a major source of revenue for the states,” he told CNN-News18.
Saket Patawari, Executive Director–Indirect Tax, Nexdigm, said it does not come out as a surprise that the states have unanimously voted to keep petroleum products outside the scope of GST considering the huge implications it could have on states’ revenue.
"However, it would have been worthwhile if the Council members had at least agreed to the constitution of the panel to lay a roadmap for ultimately including these products under GST," he added.
Among other major decisions, the GST Council has decided to charge food delivery platforms such as Swiggy and Zomato a tax even and it has extended concessional tax rates on certain COVID-19 drugs by three months till December 31. Sitharaman said 5 percent GST will be levied at the point where the delivery by food aggregators is made.
Friday’s GST Council meeting chaired by Sitharaman was the first physical meeting following the COVID-19 pandemic held in Lucknow.
(Edited by : Kanishka Sarkar)
First Published: IST