Lok Sabha Question No. 1881 (UNSTARRED), answered on 2018-12-21
Subject: Petroleum Products under GST
Ministry: FINANCE
Asked by: BHAIRON PRASAD MISHRA, KALIKESH NARAYAN SINGH DEO

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

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## LOK SABHA

## UNSTARRED QUESTION NO.1881

## TO BE ANSWERED ON FRIDAY THE 21 ST  DECEMBER, 2018 AGRAHAYANA 30, 1940 (SAKA)

## PETROLEUM PRODUCTS UNDER GST

## 1881. SHRI BHAIRON PRASAD MISHRA: SHRI KALIKESH N. SINGH DEO:

Will the Minister of FINANCE be pleased to state:

- (a) whether the overall average tax component on the prices of diesel and petrol this year has reached a 100 per cent of the base price of these commodities, if so, the break-up of taxes imposed on sale of petrol and diesel per litre for year 2018-19, State/UT-wise;
- (b) whether the Government proposes to do away with the present taxation system on petrol and diesel and has taken any new initiative to persuade the States/ UTs to bring petroleum products also under GST, if so, the details and the outcome thereof; and
- (c) whether bringing diesel and petrol under the pan-India tax umbrella of GST will cause any significant decrease in prices of these commodities and if so, the details thereof?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI SHIV PRATAP SHUKLA)

- (a): Prices  of  petrol  and  diesel  have  been  made  market  determined  by  the Government with effect from  26.06.2010  and  19.10.2014 respectively.  Since  then, the  Public  Sector  Oil  Marketing  Companies  (OMCs)  take  appropriate  decision  on pricing of petrol and diesel in line with international product prices and other market conditions. This results in change in price on a day to day basis.

The price buildup of petrol and diesel as on 19 th December, 2018 (as per IOCL at Delhi) is given below:

(in Rs. per litre)

|   S. No. | Elements                                 | Petrol   | Diesel   |
|----------|------------------------------------------|----------|----------|
|        1 | Price before Taxes and Dealer Commission | 34.04    | 38.67    |
|        2 | Central Excise Duty [A]                  | 17.98    | 13.83    |
|        3 | Dealer Commission                        | 3.59     | 2.53     |
|        4 | State VAT [B]                            | 15.02    | 9.51     |
|        5 | Retail Selling Price [C]                 | 70.63    | 64.54    |
|        6 | Total Tax incidence percentage [(A+B)/C] | 96.9%    | 60.3%    |

The overall tax incidence comes out as 96.9% for petrol and 60.3% for diesel being sold at Delhi.

Similarly, for other states/UTs, the rate of state VAT is different and the overall tax incidence changes accordingly.

(b) & (c): As  per  Article 279 A (5) of the Constitution, the Goods and Service Tax 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  aviation  turbine  fuel  (ATF).  As  per  the  section  9(2)  of  the  CGST  Act, inclusion of these products in GST will require recommendation of the GST Council. So  far,  the  GST  Council  has  not  made  any  recommendation  for  inclusion  of petroleum products under GST.

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