The government s efforts to roll out the goods and services tax (GST) on April 1 next year has run into more hurdles as states have reiterated a demand that petroleum products be kept out of the proposed indirect tax regime.
Petroleum products have to be kept out of GST, Asim Dasgupta, chairman of the empowered committee of state finance ministers, told reporters today.
The Centre has been insisting on including petrol and other petroleum products within GST to check the huge volatility in fuel prices.
Addressing the Lok Sabha yesterday, finance minister Pranab Mukherjee had called for the inclusion of petroleum products in the proposed tax so that sharp domestic price movements could be checked.
If we bring petrol and other petroleum products within GST s purview and with your support introduce it from April 2011, I do feel variations in petroleum prices can be taken care of, Mukherjee had said.
Mukherjee repeated the request in the Rajya Sabha today. However, even some Congress-run states are not in favour of including oil products within GST.
Recently, Delhi finance minister A.K. Walia had said he would request the empowered panel and the Centre to keep diesel, petrol, and CNG out of the indirect tax ambit.
Keeping oil products and CNG within GST will result in financial losses to the Delhi government, which is facing a funds crunch because of the the huge spend on the Commonwealth Games, Walia had said.
A discussion paper floated by the empowered committee also talks about keeping petroleum products out of the purview of GST.
As far as petroleum products are concerned, it was decided that the basket of petroleum products, crude, motor spirit (including aviation turbine fuel) and high speed diesel would be kept outside GST, the paper said.
At present, petroleum products are outside the purview of state-level VAT.
The discussion paper had said that sales tax could continue to be levied by the states on these products with prevailing floor rate. Similarly, the Centre could also continue its levies.
It also said a final view whether natural gas should be kept outside the GST ambit will be taken after further deliberations.
The empowered committee's decision is yet another blow to the Centre's plans over the proposed GST.
Yesterday, the states rejected the draft constitutional bill to roll out GST, opposing the veto power of the Union finance minister over state taxation issues.
The Centre has proposed a three tier-rate structure for GST--20 and 12 per cent for goods and 16 per cent for services.
GST is slated to be introduced from next fiscal, after the earlier deadline of implementing it from this fiscal was missed.
Petroleum products have to be kept out of GST, Asim Dasgupta, chairman of the empowered committee of state finance ministers, told reporters today.
The Centre has been insisting on including petrol and other petroleum products within GST to check the huge volatility in fuel prices.
Addressing the Lok Sabha yesterday, finance minister Pranab Mukherjee had called for the inclusion of petroleum products in the proposed tax so that sharp domestic price movements could be checked.
If we bring petrol and other petroleum products within GST s purview and with your support introduce it from April 2011, I do feel variations in petroleum prices can be taken care of, Mukherjee had said.
Mukherjee repeated the request in the Rajya Sabha today. However, even some Congress-run states are not in favour of including oil products within GST.
Recently, Delhi finance minister A.K. Walia had said he would request the empowered panel and the Centre to keep diesel, petrol, and CNG out of the indirect tax ambit.
Keeping oil products and CNG within GST will result in financial losses to the Delhi government, which is facing a funds crunch because of the the huge spend on the Commonwealth Games, Walia had said.
A discussion paper floated by the empowered committee also talks about keeping petroleum products out of the purview of GST.
As far as petroleum products are concerned, it was decided that the basket of petroleum products, crude, motor spirit (including aviation turbine fuel) and high speed diesel would be kept outside GST, the paper said.
At present, petroleum products are outside the purview of state-level VAT.
The discussion paper had said that sales tax could continue to be levied by the states on these products with prevailing floor rate. Similarly, the Centre could also continue its levies.
It also said a final view whether natural gas should be kept outside the GST ambit will be taken after further deliberations.
The empowered committee's decision is yet another blow to the Centre's plans over the proposed GST.
Yesterday, the states rejected the draft constitutional bill to roll out GST, opposing the veto power of the Union finance minister over state taxation issues.
The Centre has proposed a three tier-rate structure for GST--20 and 12 per cent for goods and 16 per cent for services.
GST is slated to be introduced from next fiscal, after the earlier deadline of implementing it from this fiscal was missed.
