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Amid record-high fuel prices, Finance Minister Nirmala Sitharaman has said there is no proposal as of now to bring crude oil, petrol, diesel, jet fuel (ATF) and natural gas under the Goods and Services Tax (GST). When the GST was introduced on July 1, 2017, amalgamating over a dozen central and state levies, five commodities - crude oil, natural gas, petrol, diesel, and aviation turbine fuel (ATF) - were kept out of its purview given the revenue dependence of the central and state governments on this sector. This meant that the central government continued to levy excise duty on them while state governments charged VAT.

Sitharaman said the law prescribes that the GST Council shall recommend the date on which the goods and services tax be levied on petroleum crude, high-speed diesel, motor spirit (commonly known as petrol), natural gas and ATF. She said ‘So far, the GST Council, in which the states are also represented, has not made any recommendation for inclusion of these goods under GST’.

She added that the Council may consider the issue of inclusion of these five petroleum products at a time it considers appropriate keeping in view all the relevant factors, including revenue implication. Including oil products in GST will not just help companies set off tax that they paid on input but will also bring about uniformity in taxation on the fuels in the country. Sitharaman has in recent weeks talked of inclusion of fuel under GST as well as centre and states taking a joint call on cutting taxes to cushion consumers against the spike in retail prices.