Govt Official says 45th GST Council rejects levying GST on petrol & diesel due to revenue implications

A government official informed CNBC-TV18 on December 1 that because of the ongoing COVID-19 pandemic, petrol and diesel cannot be brought under the goods and services tax (GST) regime.

The GST Council took the decision owing to “revenue implications,” according to the official.

“Due to financial concerns, the 45th GST Council rejects levying GST on gasoline and diesel.” “The council suspends GST on petrol until the COVID-19 problem is resolved,” the official stated.

Centre’s excise mop-up on fuel

Notably, the central government’s take from excise duty on petrol and diesel more than doubled to Rs 3.72 lakh crore in the financial year 2020-21, with states receiving less than Rs 20,000 crore, according to a government reply in the Rajya Sabha on Tuesday.

In a written response to a query, Minister of State for Finance Pankaj Chaudhary claimed that revenue from the levy of central excise duty on petrol and diesel increased from Rs 1.78 lakh crore in 2019-20 to Rs 3.72 lakh crore in 2020-21. (April 2020 to March 2021).

The increase in collection was mostly due to an increase in the incidence of fuel taxation. In 2019, the total excise duty on petrol was Rs 19.98 per litre and diesel was Rs 15.83 per litre. Last year, the government increased excise duty on fuel twice, to Rs 32.98 per litre and Rs 31.83 on diesel.