*****Bring fuel under GST to cushion from impact of volatile oil prices, says SBI report – The Economic Times

Clipped from: https://economictimes.indiatimes.com/industry/energy/oil-gas/bring-fuel-under-gst-to-cushion-from-impact-of-volatile-oil-prices-says-sbi-report/articleshow/91909052.cms?utm_source=ETTopNews&utm_medium=HPTN&utm_campaign=AL1&utm_content=23

Synopsis

This is not the first time that the experts have suggested inclusion of fuel under the GST regime. Speaking to Mint, Bibek Debroy, chairman of Prime Minister Narendra Modi’s Economic Advisory Council (EAC-PM), also advocated bringing fuel under the GST. ​​The SBI report said that the states have a further fiscal room to cut taxes on fuel by Rs 2-5 per litre.

An

SBI

NSE -1.37 % report has suggested inclusion of fuel under GST to cushion from the impact of fluctuating revenue due to volatility in oil prices.

“The ultimate solution to reduce the complexities in oil tax structure and bring down extreme volatility in oil revenues due to volatile crude price would be to bring it under the ambit of GST,” the report said.

This is not the first time that the experts have suggested inclusion of fuel under the GST regime. Speaking to Mint, Bibek Debroy, chairman of Prime Minister Narendra Modi’s Economic Advisory Council (EAC-PM), also advocated bringing fuel under the GST.

“Therefore, the sooner you bring in petroleum and related products into GST, the better it is. I personally believe everything should be in GST,” said Debroy. “Even if there is no issue of inflation management, from the point of view of just reforming GST, it is desirable that petroleum products are brought into GST. Incidentally, it will also help in inflation management,” explained Debroy.

Fuel attracts levies both at the Centre and state level. Centre imposes an excise duty on petrol and diesel while states levy VAT.

The Centre recently cut the excise duty on petrol and diesel by Rs 8 and Rs 6 per litre respectively. Some of the states inclusing Maharashtra, Kerala and Rajasthan repsonded to the move by cutting taxes on fuel.

The SBI report said that the states have a further fiscal room to cut taxes on fuel by Rs 2-5 per litre.

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