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India considers imposing GST on petroleum

The Indian Goods and Services Tax Council (GSTN) is considering bringing fuel into the GST net. Since the implementation of GST in 2017, it has been excluded and left to local states to tax. The GSTN is reviewing a single India-wide rate. This would require a 75% majority backing from the GSTN.

This latest review has come as state taxes on fuel has pushed it to new record levels, sparking criticism for the regime. Taxes now make-up over 50% of the cost of diesel and petrol, which is pushing inflation up just as the economy is trying to recover from the COVID-19 pandemic.

India is considering reducing from four to three main GST rates in 2022. Sign-up for VAT Calc’s FREE global VAT and GST news e-mail updates.

GSTN supervises indirect tax regime

The GSTN is a non-government committee which oversees the running of the Indian Goods and Services Tax regime, including IT infrastructure. It is 51% owned by private banks and similar finance houses, with the remainder the by Central and State governments.

The GSTN group faces further tough decisions. In particular the upcoming ending of state five-year GST compensation period.

 

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