reflexes
Under GST, the price will drop by Rs 20-30.
However, because of this, governments will have to bear a huge revenue shortfall.
According to the Center, state governments are not prepared for this.
New Delhi. Many important decisions were made at the 49th GST Council meeting on February 18, 2023. At this meeting, the GST on Raab, pencil sharpeners and some tracking devices were reduced. Before the GST Council meeting on February 16, Nirmala Sitharaman had said that the central government is ready to bring in gasoline and diesel, but it is necessary for the states to agree first. Even before this, many times central government ministers have given positive statements to include petroleum products under the GST.
In general, it all comes down to states. If we look at the current tax structure on petroleum products, both the central and state governments gain a lot from taxing them. If these products are subject to the GST, the revenue of the governments will decrease a lot. However, ordinary people will make tremendous money out of this. How, let’s see.
read this also- Stable crude prices, gasoline-diesel became more expensive in many parts of the country, see the price of your city
Understanding Current Gas Tax Mathematics
Let’s try to understand from the example of New Delhi how much tax is levied on gasoline today and how much it will be after moving to GST. The gasoline is currently being sold to dealers in Delhi for Rs 57.36. There is an excise tax of Rs 19.90 on this. After this, the dealer commission is added to it, which averages Rs 3.75. Now states impose a different VAT (Value Added Tax) on the value that is created. In Delhi it is 19.40 percent. Thus, the VAT was 15.71 paise. Overall, the price of 1 liter of gasoline in Delhi has gone up to Rs 96.72.
What will be the price if it comes under GST?
If the central and state governments make gasoline subject to GST, VAT and excise duties will be eliminated. Suppose the highest rate of GST applies to gasoline at 28 percent. Now, the price at which the dealer gets the petrol (Rs 57.36) will attract 28 per cent of the GST. The gasoline tax will be reduced to Rs 16.06. Even if the dealer commission of Rs 3.75 is added to this, the price of gasoline will approach Rs 77 only. However, because of this, states and central governments will have to bear a huge loss of revenue.
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Tags: Business News, Finance Minister Nirmala Sitharaman, VAT, gasoline and diesel, gasoline diesel price, Tax
FIRST POSTED: Feb 19, 2023 11:08 AM IST
