Finance Ministry, in favor of not cutting excise on petrol and diesel, will take time to decide on GST
In view of the continuous increase in the price of petrol and diesel, the Ministry of Finance had requested the Finance Ministry to reduce the excise duty. But sources say that the finance ministry is not ready for this at the moment.
New Delhi: Excise duty on petrol and diesel is not yet expected. At the same time, it will take time to bring both petroleum products into the realm of goods and services ie GST. Highly placed sources of government have given these signals.
excise duty
In view of the continuous increase in the price of petrol and diesel, the Ministry of Finance had requested the Finance Ministry to reduce the excise duty. But sources say that the finance ministry is not ready for this at the moment. The concern of Ministry of Finance is that the reduction in excise duty will have an impact on the loss of the public exchequer. Highly placed sources in the negotiation with ABP News said, "It is not appropriate to increase fiscal deficit." The government has set a target to restrict the loss of public treasury to 3.2 percent of gross domestic product (GDP) for fiscal year 2017-18. . Likewise, the government is struggling with the lack of income, now if the excise duty is reduced, the problem will increase.
The central government imposes excise duty on petrol at Rs 19.48 and diesel at 15.33 rupees per liter. In addition, in different states and union territories 6 to 40 per cent of petrol and 6 to 29 per cent of diesel sales tax / VAT is levied. In the past, the Center had reduced the excise duty at the rate of two rupees. Along with this, the state government asked to reduce sales tax. But less than half a dozen states reduced rates, it is not appropriate to reduce the rates by the reduction of earnings reduction by the rest. It is worth mentioning that between November 2014 and January 2016, excise duties were increased nine times on petrol and diesel while at the same time the prices of crude in the international market were at the lower level. Now when the price is fast, the demand for reduction in excise duty is holding fast.
excise duty
In view of the continuous increase in the price of petrol and diesel, the Ministry of Finance had requested the Finance Ministry to reduce the excise duty. But sources say that the finance ministry is not ready for this at the moment. The concern of Ministry of Finance is that the reduction in excise duty will have an impact on the loss of the public exchequer. Highly placed sources in the negotiation with ABP News said, "It is not appropriate to increase fiscal deficit." The government has set a target to restrict the loss of public treasury to 3.2 percent of gross domestic product (GDP) for fiscal year 2017-18. . Likewise, the government is struggling with the lack of income, now if the excise duty is reduced, the problem will increase.
The central government imposes excise duty on petrol at Rs 19.48 and diesel at 15.33 rupees per liter. In addition, in different states and union territories 6 to 40 per cent of petrol and 6 to 29 per cent of diesel sales tax / VAT is levied. In the past, the Center had reduced the excise duty at the rate of two rupees. Along with this, the state government asked to reduce sales tax. But less than half a dozen states reduced rates, it is not appropriate to reduce the rates by the reduction of earnings reduction by the rest. It is worth mentioning that between November 2014 and January 2016, excise duties were increased nine times on petrol and diesel while at the same time the prices of crude in the international market were at the lower level. Now when the price is fast, the demand for reduction in excise duty is holding fast.
GST
In view of the continuous increase in prices, this issue has also fueled the issue that the petrol and diesel should be brought under the purview of the goods and services tax. Under the current constitution, under the amendment of the constitution, petrol and diesel have been kept under the purview of GST, but when it will come into force, the GST Council has to decide. Unless the date is fixed, then the central and state governments will have the right to recover taxes at their own level.
A senior government official said that it is not the right time to bring gasoline and diesel into the realm of GST. The reason is that, when determining the rate of GST on any item or service, the revenue neutral rate, ie RNR, is taken care of. RNR stands for the rate at which the center and state There is no special damage to Now there is a problem in the matter of petrol and diesel, that the RNR gets much more due to current rates of taxes on petrol and diesel of the states and states.
For instance, a liter of petrol in Delhi costs 72 rupees 49 paise on Thursday. For the dealer, it costs Rs 34, while on average it is Rs 3 and 60 paise. Talking about tax on the other hand, the central government levies Rs.18 and 48 paise as excise duty, whereas in the treasury of the Delhi government, 15 rupees 51 goes through the sales tax. This means that the total tax is charged as 34 rupees 89 paise, which is more than hundred percent of the original cost. The official said that in such a situation, the rate of GST would be more than 100% from the existing formula, which would not be acceptable from anywhere.
Then what is the solution, the officer says that till the earnings from GST does not get better till then, it will not be possible to bring gasoline and diesel to GST.
In view of the continuous increase in prices, this issue has also fueled the issue that the petrol and diesel should be brought under the purview of the goods and services tax. Under the current constitution, under the amendment of the constitution, petrol and diesel have been kept under the purview of GST, but when it will come into force, the GST Council has to decide. Unless the date is fixed, then the central and state governments will have the right to recover taxes at their own level.
A senior government official said that it is not the right time to bring gasoline and diesel into the realm of GST. The reason is that, when determining the rate of GST on any item or service, the revenue neutral rate, ie RNR, is taken care of. RNR stands for the rate at which the center and state There is no special damage to Now there is a problem in the matter of petrol and diesel, that the RNR gets much more due to current rates of taxes on petrol and diesel of the states and states.
For instance, a liter of petrol in Delhi costs 72 rupees 49 paise on Thursday. For the dealer, it costs Rs 34, while on average it is Rs 3 and 60 paise. Talking about tax on the other hand, the central government levies Rs.18 and 48 paise as excise duty, whereas in the treasury of the Delhi government, 15 rupees 51 goes through the sales tax. This means that the total tax is charged as 34 rupees 89 paise, which is more than hundred percent of the original cost. The official said that in such a situation, the rate of GST would be more than 100% from the existing formula, which would not be acceptable from anywhere.
Then what is the solution, the officer says that till the earnings from GST does not get better till then, it will not be possible to bring gasoline and diesel to GST.
Source - PPAC
Table 2
Effective rate of Sales Tax / VAT on petrol and diesel
| State / UT | petrol | diesel | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| state | Effective rate of sales tax / VAT | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Andra Pradesh | 36.42% | 29.12% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Arunachal Pradesh | 20.00% | 12.50% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Assam | 30.72% | 22.64% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bihar | 24.57% | 18.22% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Chhattisgarh | 27.14% | 25.88% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Delhi | 27.00% | 17.32% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goa | 16.57% | 18.76% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gujarat | 25.42% | 25.51% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Haryana | 26.25% | 17.22% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Himachal Pradesh | 24.27% | 14.28%
|
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