List reasons for not Including Petrol, Diesel Under GST: Kerala High Court

List reasons for not Including Petrol, Diesel Under GST: Kerala High Court The Kerala High Court on Monday inquired about the Goods and Services Tax (GST) Council. The main question that aroused was that why petroleum products could not be included under the GST. The Kerala High Court directed the Goods and Service Tax Council to file a reply within ten days A PIL was heard by a division bench of Chief Justice S Manikumar and Justice Shaji P Chaly. Under their directions, it was directed to the GST Council to explain reasons for not including petrol and diesel within the ambit of GST. The PIL was filed by Kerala Pradesh Gandhi Darshanvadi. It is a voluntary organization, who filed its PIL through its counsel Arun B Varghese. The counsel argued that prices of petrol and diesel vary in different states as tax imposed by them was different and sought a uniform tax regime for petroleum products. It is quoted that the cost of petrol and diesel differs in various states as the tax imposed through them was varied and seeks a sustained as well as continuous tax regime towards the petroleum products. It also cited that though the union and state governments plead helplessness in this citing petroleum marketing companies, both got involved in the reduction of fuel price before elections.

The petitioner through its counsel claimed for the following reliefs:

• To issue a writ of mandamus or any other writ or order administering the Centre and Ministry of Petroleum and Natural Gas to include petrol and diesel under the GST regime.
• To issue a writ of mandamus or any other writ or order administering the GST Council to suggest the inclusion of petrol and diesel under the GST regime to achieve a sustainable national market as contemplated under Article 279 A (6) of the Constitution of India.
• To proclaim that the non-inclusion of petrol and diesel under the GST regime was violative of Articles 14 and 21 of the Constitution of India.

The petitioner had also submitted a depiction to the Government of Kerala to request the GST Council to include the petrol and diesel in the GST regime and had also proposed that till a decision is taken by the GST Council, the Government of Kerala may refrain from levying the state tax on petrol and diesel. However, the outlook  taken by the Centre government and the Ministry of Petroleum and Natural Gas was that inclusion or deletion of GST is a policy decision. Adopting the same line of argument, and placing reliance on the decision in Union of India v. Shiyaad, W.A.No.2061 of 2017, the GST Council submitted that a no mandamus can be issued to the GST Council to take any decision and that the Union government is the competent authority to take a decision on the above said issue. In the light of the above, the Bench directed the GST Council to forward the representation made by the petitioner to the Centre government. Similarly, the Centre government was asked to take an appropriate decision within a period of six weeks. “Now different rates are being charged in different states and same is due to a different rate of tax levied by the state governments under their split taxing policies. This is an obstruction to coordinate national market as observed under Article 279(A) 6 of the constitution,” the PIL mentioned. It also mentioned in their PIL that the state and central taxes will account for at least 60 per cent of the price of one litre of fuel. If petrol and diesel are brought under the inclusion of GST, there will be a balanced market across the nation and the maximum taxable rate will be 28%. It even mentioned that adding those people who are not direct consumers of fuel are affected by the unprecedented price rise. “A welfare state must be the one where everyone is in a position to bear expenses of basic amenities. The unprecedented hike in fuel prices push the public to immense hardships by which their right to life guaranteed under Article 21 is violated,” it said. Respondents in the PIL are the Union of India, Kerala Government, Petroleum Secretary, Goods and Service Tax Council and three major oil companies. The Centre and the GST Council can’t argue that if the fuel was included in the GST, it would have consequential implications on revenue collection. A constitutional responsibility was cast upon the GST Council to make a significant recommendation to include both (petrol and diesel) under the GST, the PIL said. “To declare the non-inclusion of petrol and diesel under the GST regime are violative of the Article 14 and 21 of the constitution,” it said.