Explanator: Are petrol and diesel prices subject to GST?

Summary

Demand for bringing petrol and diesel under GST has once again gained momentum. People say this is the only way to save the country as petrol and diesel prices have skyrocketed.

Petrol and diesel prices are constantly rising.
– Photo: Amar Ujala

Listen to the news

Petrol and diesel prices are skyrocketing and the entire industrial sector is booming due to inflation. Due to the increased transportation cost, there was a huge increase in the price of consumer goods, and then the business also almost came to a standstill due to low demand. With this in view, the demand for bringing petrol and diesel under GST has once again intensified. People say this is the only way to save the country as petrol and diesel prices have skyrocketed. But is it so easy to bring petrol and diesel under GST? What are the barriers to this path and what are its implications for the market?

Sadeep Bansal, president, All India Trade Board, said the market was paralyzed by sharp rise in petrol and diesel prices. As the Navratri-Dussehra and Diwali festive seasons came to an end, consumers flocked to the market with no money on hand to spend. He said if the government brought petrol prices under GST, it would curb inflation and speed up the market. Dr Devesh Birwal, a professor in the Department of Economics at Delhi University, told Amar Ujala that various issues need to be discussed in depth before bringing petrol and diesel under GST. After the new tax assessment system, revenue sources with states are very limited. States’ revenues have been declining even after the VAT policy came into force. Since the states also need a lot of money to invest in welfare schemes, it cannot be said that bringing petrol and diesel under GST without ensuring the revenue of the states is the right move. This may be the reason why the states have brought petrol and diesel under GST at the GST Council meeting in Lucknow.

The economic and social conditions of all states are different. States like Delhi, Maharashtra and Tamil Nadu are relatively more developed, have better economic infrastructure, and have many other sources of revenue, including taxes on petrol. On the other hand, states like Odisha, Jharkhand and Chhattisgarh are lagging behind in the development race. With the exception of taxes on petrol and diesel, their sources of income through other sources are very limited. However the need to invest in welfare schemes in these states is very high.

In such a situation, it would not be very appropriate to bring states with different socio-economic conditions under a single GST policy. But, if the Central and State Governments are able to devise a well-thought-out arrangement for the distribution of tax collected after consultation, it should be considered. This method may become a tool to reduce petrol prices, but because of this, care must be taken not to affect other important tasks. Dr Devesh Birwal said petrol and diesel prices would increase the cost of transport as well as industrial areas in many ways. As commodity prices rise, industries are less likely to reap the expected benefits. This is the reason why entrepreneurs do not invest when there is inflation, which creates the risk of halting the pace of growth. To sustain the growth rate, the government must take steps to control inflation.

There seems to be some impact in the market at this point as well. Even though interest rates are currently at an all-time low, the industrial sector is still avoiding borrowing and avoiding new investments. The rise in inflation has an impact on people’s savings and reduces spending efficiency. This leads to lower sales of goods and lower demand. This will slow down the whole process. He suggested that the government should immediately curb inflation to maintain the growth rate of all sectors. BJP national spokesperson and economist Rajiv Jaitley said during this time the government should build roads, provide houses to the homeless, provide tap water to every household, provide free rations to 80 crore families and nearly 10 crore farmer families. The whole country is spending a huge amount of money every year on financial assistance of six thousand rupees, free corona vaccine and the construction of hospitals and medical colleges. This money comes from these taxes. Without it, all these social activities would be disrupted, so the government should follow a proper tax policy.

He said it was not wrong for people to believe that the tax he was paying would be used properly. This is the reason why people stay with the government because people are watching and listening to the public welfare work being done by the Narendra Modi government at the Center. The central government has proposed to set up public and private companies to buy crude oil. It is expected that this will lead to the purchase of large quantities of crude oil and its prices will be relatively low. Second, the central government decided to use its reserve oil. This will help reduce oil purchases and curb prices.

Expansion

Petrol and diesel prices are skyrocketing and the entire industrial sector is booming due to inflation. Due to the increased transportation cost, there was a huge increase in the price of consumer goods, and then the business also almost came to a standstill due to low demand. With this in mind, the demand for bringing petrol and diesel under GST has intensified once again. People say this is the only way to save the country as petrol and diesel prices have skyrocketed. But is it so easy to bring petrol and diesel under GST? What are the barriers to this path and what are its implications for the market?

Sadeep Bansal, president, All India Trade Board, said the market was paralyzed by sharp rise in petrol and diesel prices. As the Navratri-Dussehra and Diwali festive seasons came to an end, consumers flocked to the market with no money on hand to spend. He said if the government brought petrol prices under GST, it would curb inflation and speed up the market.

.

[ad_2]

Source link

Leave a Comment

%d bloggers like this: