GST on petroleum products will take place in stages, says Finance Ministry

India’s Finance Secretary Hasmukh Adhia
India’s Finance Secretary Hasmukh Adhia

New Delhi : India’s Finance Secretary Hasmukh Adhia announced that GST Council will bring petroleum products under the goods and services tax (GST) and the decision will come into action in stages. The statement was made in a meeting held on July 6. 

Talking about the issue, Central Board of Indirect Taxes and Customs Chairman S Ramesh said although there is demand for bringing petroleum products under GST, the GST Council will have to confirm modalities. 

Currently, diesel, petrol, crude oil, natural gas and aviation turbine fuel do not charge any goods and services tax, and states have the right to impose value added tax on these items. 

"One of the demands that is there before us, we will see... everything will happen in stages," Adhia said at an event here. 

The civil aviation ministry has repeatedly raised its concern on the high rate of taxes on aviation turbine fuel, which accounts for a major hunk of an airline's operational costs and also has a bearing on air fares. 

Earlier, the civil aviation ministry had also written to the finance ministry seeking the addition of jet fuel under the indirect tax rule with full input tax credit at the earliest. 

As of now, the finance ministry has expressed its idea to include natural gas and ATF within the purview of the goods and services tax soon. 

"We have done a lot but that it does not mean that there is no scope for betterment of the existing system. We still believe that we need to do a lot more and we are working in that direction," Adhia said. 

Speaking about the issue of automation of refund, he said it was meant to be automated right from day one but since there was so many human errors in filing return that the income-tax department had to switch on to manual mode at the last moment. 

"We are again trying to make it completely automatic, the entire refund process. This is next thing. In terms of simplification of rates, slabs, we do understand need for it but we did what was best in the given scenario. 

"We could not have done anything other than this because we had to take care of revenue, we had to take care of concern of poor. Certainly we must move in that direction of something better than that," the secretary said.