Petroleum products likely to be brought under GST regime

By | September 14, 2016

Petroleum products likely to be brought under GST regime

Petroleum productscould be taxed under the proposed goods and services tax (GST). If it would happen, this move will reduce the imperfections in the new levy and also narrow the inflationary impact of the tax.

A proposal favouring imposition of a modest tax on these products is being examined and is expected to be taken up by the newly constituted GST Council where the government will try and convince states of its merit. The idea is to have some minimal tax of about 2-3 per cent so that seamless flow of credit is not broken and cascading is removed.

States have been opposed to a change in tax regime for petroleum goods, an easy way of quickly mopping up revenues if needed. But now thinking has veered around to having some minimal tax from the beginning as it could help in bringing down the overall tax rate and allow the industry to get credit.

The newly set up GST Council will meet later this month to take a call on crucial issues. Prime Minister Narendra Modi will also attend a presentation on the GST framework and issues connected with it on Wednesday. Source:http://economictimes.indiatimes. com {14-09-2016]

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