What happens if GST implement on petrol & diesel
GST was introduced on 1st April 2017, at that time petroleum products were kept out of the preview of GST u/s 9(2).
Central & State government are taking Excise & Vat Tax respectively on petrol & Diesel.
Analysis of GST on petrol & Diesel
Nowadays petrol & Diesel are crossing RS 100 in many states, its main reason is double taxation on petrol & diesel.
The central government are taking the Excise tax & the State government taking VAT tax, due to this reason cascading effect of tax on tax, (state VAT being levied not just on the cost of production but also on the excise duty charged by the Centre on such output).
Different states are charging different prices of petrol & diesel its main reason is different tax rate is levied by the state governments.
But after GST on petrol & diesel cascading effect will eliminate & similarity will come in prices of petrol & diesel among different states.
GST is a consumption-based tax, bringing petroleum products under the GST regime would have mean states where these products are sold get the revenue and not ones that currently derive the most benefit out of them because they are production centres.
Simply put, Uttar Pradesh and Bihar with their huge population and a resultant high consumption would get more revenues at the cost of states like Gujarat.
If GST will implement on Petrol & diesel, then it will heavily affect centre & state government revenue but it will beneficial for the public, businessmen.
Including oil products in GST will not just help companies set off tax that they paid on input but will also bring about uniformity in taxation on the fuels in the country.
So it will beneficial for all of us if petrol & diesel come under GST Regime.