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Only a matter of time before fuels brought under GST: Dharmendra Pradhan

 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.

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