Petrol under GST: Decision after weighing revenue impact, says MP minister

The Madhya Pradesh govt has reduced VAT on petrol and diesel by three and five per cent, respectively

The Madhya Pradesh Government on Tuesday said it would decide on bringing petroleum products under the Goods and Services Tax after considering its impact on the revenue.

Speaking to reporters after a cabinet meeting here, Finance Minister Jayant Malaiya said, "The government will take the revenue outcome in consideration before reaching consensus on bringing petroleum products under the GST regime.

"Discussions are going on about bringing petroleum products under the GST's purview. We will take appropriate decision whenever the proposal is brought before the GST Council," he added.

To a question, Malaiya admitted that there is a shortfall in tax collection following the introduction of the GST, but added that the situation has been improving.

He, however, parried the questions about the quantum of shortfall.

On October 13, the state government reduced the value added tax (VAT) on petrol and diesel by three and five percent, respectively. Besides, the additional cess of Rs 1.5 per litre on diesel was also withdrawn.

Malaiya had then claimed that diesel had become cheaper in MP compared to neighbouring Rajasthan, Gujarat and Chhattisgarh, while also mentioning that about 34 per cent of the commercial tax revenue comes from VAT and other taxes on petroleum products.