On Friday, Finance Minister Nirmala Sitharaman agreed that there was a lawsuit against consumers for lowering petrol and diesel prices, but said the central and state governments should jointly call for a tax cut. In some parts of Rajasthan, Madhya Pradesh and Maharashtra, petrol is more than 60 per cent of the retail price and is nowhere else in the country, which is a centrally created and state tax. Diesel rates are taxed at a record 56 percent.
Citharmon, which has raised the central excise duty on petrol and diesel by a record margin after international oil prices fell to a two-decade low, is reluctant to take the first step in paying central taxes.
Speaking to reporters at IWPC, he said, “Suffice it to say that prices should be reduced, it is a burden.”
He said the burden on customers was a “burden” but the price needed to be determined.
“That’s where I use the word tribulation,” he said. “This is what I want to talk to the state and the center, because it’s not only the center of petroleum products, it’s also the charge of the states.”
He said both the states and the Center were earning more revenue than the taxes levied on petrol and diesel, adding that 41 per cent of the central tax collection would go to the states.
“So there is an issue that is stratified and as a result it should be an issue to talk to the center and the states,” he said.
The Finance Minister said the introduction of petrol and diesel in the Goods and Services Tax (GST) regime, which would end the sharp impact of the tax and bring uniformity, would call for the establishment of a GST Council topping the list. Notch Tax Disciplinary Agency.
Currently, the central government sets the rate at a fixed rate, while the states impose different rates of VAT. Under the GST, the two would bring together uniformly and resolve the issue of higher fuel rates in states with higher VAT.
“Whenever the GST Council decides to take up the matter, they are eager to take up the matter and discuss it. They call on the Council to take up the matter,” he said.
Asked if the Center would take up such a proposal with the Center at the next meeting to be held this month, he said, “The Council will call at a time close to the meeting date.”
Between March 2020 and May 2020, Sitterman raised tariffs on petrol and diesel by Rs 13 and Rs 16 per liter, which is now one-third of Delhi’s petrol at Rs 91.1 and Rs 40 and 40 per cent at Rs 81.47 per liter.
Earlier this week, SBI economists said in a report that the price of petrol could be reduced to Rs 755 per liter across the country if it is brought under GST.
Diesel comes to Rs 686 per liter and central and state revenues are expected to fall by just Rs 1 lakh crore or 0.4 per cent of GDP.