Lok Sabha Question No. 158 (UNSTARRED), answered on 2022-07-18
Subject: Inclusion of Petrol and Diesel under GST
Ministry: FINANCE
Asked by: Thalikkottai Rajuthevar Baalu

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

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## LOK SABHA

## UNSTARRED QUESTION NO.158

## TO BE ANSWERED ON MONDAY, JULY 18 TH  2022/ASHADHA 27, 1944 (SAKA)

## INCLUSION OF PETROL AND DIESEL UNDER GST

## 158.  SHRI T.R. BAALU:

## Will the Minister of FINANCE be pleased to state:

- (a) whether the Government is aware that prices of petrol and diesel in India are the highest in the world  because  of  extraordinarily  high  level  of  taxes  placing  heavy  burden  on  millions  of  twowheeler using middleclass population;
- (b) if so, the details of tax elements in petrol and diesel prices build-up;
- (c) the time by which petroleum products will be brought under the Goods and Services Tax (GST) net so as to levy reasonable tax rate; and
- (d) whether the Government is not prepared to bring petrol and diesel under GST and if so, the reasons therefor?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

(a)  and  (b): The  Prices  of  petrol  and  diesel  have  been  market-determined  with  effect  from 26.06.2010 and 19.10.2014 respectively. The Public Sector Oil Marketing Companies (OMCs) take appropriate decision on pricing of petrol and diesel in line with their international product prices, exchange rate, tax structure, inland freight and other cost elements etc. The Government keeps a close watch on these factors and makes interventions by way of calibrating Excise Duty rates on these  products  as  and  when  required.  Government  has,  with  effect  from,  4th  November,  2021, reduced Central Excise Duty (including cesses) on Petrol by Rs. 5 per litre and on Diesel by Rs. 10 per litre and with effect from, 21st May, 2022, reduced Central Excise Duty (including cesses) on Petrol by Rs. 8 per litre and on Diesel by Rs. 6 per litre, to provide relief to the consumers. After such reduction in Excise Duty, tax elements in price build up of Petrol and Diesel are given below:

## (in Rs. Per litre)

| Particulars                                  |   Petrol |   High Speed Diesel |
|----------------------------------------------|----------|---------------------|
| Basic Excise Duty                            |      1.4 |                 1.8 |
| Special Additional Excise Duty               |     11   |                 8   |
| Road & Infrastructure Cess                   |      5   |                 2   |
| Agricultural Infrastructure Development Cess |      2.5 |                 4   |
| Total Excise Duty                            |     19.9 |                15.8 |

(c)  and  (d): Article  279  A  (5)  of  the  Constitution  prescribes  that  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). Also, 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, in which the States are also represented, has not made any recommendation for inclusion of these goods under GST.

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