Petroleum products should be under ambit of GST: Government

The Petroleum Minister said that in principle, the petroleum products should come under the ambit of the proposed Goods and Services Tax but a final decision would be taken when the state governments come on board

The petroleum products should come under the ambit of the proposed Goods and Services Tax (GST) but a final decision will be taken when the state governments come on board on it, the government told the Lok Sabha today.

Replying to questions, Petroleum Minister Dharmendra Pradhan said that altogether, 52 % tax is levied on petroleum products by both central and state governments and such revenues are used for various welfare and infrastructure projects.

He said that state governments are free to fix the amount of tax they want to levy on petroleum products as every state has its own aspirations and development projects which they carry out through the revenue generated from the sale of petroleum products.

Around 32 % tax is levied by the central government on petroleum products while around 20 % by state governments, he said.

"We are a welfare state and the government is committed for the welfare of the people and the country. The taxes levied by the central and state governments are used for various infrastructure and social sector projects," he said during Question Hour.

Pradhan said that in principle, the petroleum products should come under the ambit of the proposed Goods and Services Tax but a final decision would be taken when the state governments come on board.

The Minister said ever since the NDA government came into power in May 2014, prices of petrol and diesel were reduced 19 times and enhanced seven times.

He said the prices of petrol and diesel have been made market-determined with effect from June 26, 2010 and October 19, 2014 respectively.

"Since then, the public sector oil marketing companies take appropriate decisions on price of these products in line with changes in the prices in international markets and other market conditions," he said.