Even as the Opposition has taken to streets protesting against the Central government alleging inaction regarding the rising prices of petrol and diesel, the Minister for Petroleum Dharmendra Pradhan has urged the Finance Ministry to bring petroleum products under GST. Also, he has given a call to the state governments to support the decision. In case petrol comes under GST, then the petrol rate will dip from the existing Rs 80 per litre to Rs 40, reports Kannada Prabha.
The demand by Pradhan regarding petroleum products may turn into a delicate issue for the Opposition leaders politically. The big question is whether the various state governments that are making huge revenue by taxing petroleum products will agree such a demand by the minister? Besides this, in case the State and the Central government come to an understanding and bring the petroleum products under GST, then the petrol price may come down to Rs 40, it is anticipated.
Currently, petrol and diesel rates differ in different states. The reason is the difference in taxes imposed by respective states. The petrol bunks in Delhi sell at Rs 70.43 per litre. In reality, the price of the petrol is only Rs 30.41 and the rest is tax. Of this, Rs 3.57 goes to the company as profit. Of the remaining Rs 36.43 the Delhi government will take Rs 14.97 as tax. Rest Rs 21.48 goes to the Central government. Of this again Rs 11.59 out of the Rs 21.48 will be returned to the Delhi government as its share. Hence for every litre of petrol sold in Delhi, the Delhi Government will get Rs 26.56. The rest of the states also profit in the same way. Minister Dharmendra Pradhan is alleging that while making profit the states are blaming the Central government.
If petroleum products are brought under GST all other taxes amounting to 70 per cent, will be cancelled and only GST will apply. Applying 1 per cent tax will bring down petrol price to Rs 38.10 and there will be uniform rate in the country is his argument.