It is only a
matter of time before petrol and diesel are brought under
the GST regime, though no
state has stepped forward to propose this yet, union minister for petroleum and
natural gas Dharmendra Pradhan said.
Under pressure due to high fuel prices, Pradhan’s
ministry has been in favour of bringing petrol and diesel under the GST system
as subsuming central and state taxes to one levy could ease the price. But the
idea has not found any support with states, and a section at the Centre, as
they are reluctant to let go of their share of revenue, said the minister.
But he expressed optimism that petrol and diesel
would eventually be brought under GST.
He said companies in the energy sector were taking a
hit as they were unable to claim input tax credit under GST.
“All the expenditure of the oil industry —
refinery, pipeline, exploration — are being made by paying GST. That money can
only come back to them as input credit. My own state-owned oil companies are
losing as much as Rs 20,000 crore a year by not being able to claim input
credit,” said Pradhan.
The minister, speaking to a group of journalists
in Bhubaneswar, declined to comment on any significant reduction in fuel
prices, which have come down marginally after touching a four-year high.
Pradhan said he could not dictate states to
reduce VAT and other state taxes — a counter that the BJP-led government at the
Centre has put forth when questioned about what it intended doing about high
fuel prices. “Every state, irrespective of the party in power, has its own
compulsions,” said Pradhan, who in the past has asked why Naveen Patnaik’s Biju
Janata Dal government in Odisha was not considering reducing state taxes.
Pradhan said he would be the first to concede
that the common man was feeling the pinch, while noting that geo-political
developments and the exchange rate were also factors in deciding oil price.
Pradhan said he hoped states would come together
to bring petrol and diesel under GST. “The one person who could have initiated
this was Goa chief minister Manohar Parrikar,” said Pradhan. Parrikar, who is
being treated for a pancreatic condition in a New York hospital, had spoken to
him over the phone about it, and even offered to reduce VAT in Goa to 14% from
its current 16.62%, said Pradhan.