Impact of Goods and Services Tax on Petroleum Products to Curb Prices in India — A Study

Abstract

Prices of Petroleum Products i.e. Petrol and Diesel have gone up day by day. Still, petroleum products are out of the regime of Goods and Services Tax. Excise Duty, VAT and Dealers Commission are presently the three taxes in Petroleum Products. In our Study, we have seen that excise duty per litre of petrol and diesel increases by 248% and 793% in seven years. Collection of Excise Duty and VAT also increase over the years. So, in order to curb petrol and diesel prices, there is a huge need to include petrol prices under the regime of GST. In our study, we have found that if petrol and diesel come under the ambit of GST, then projected price per litre will come down. Similarly, State’s exchequer will lose revenue if petrol and diesel will come under the highest slab in GST. So, Govt. of India through the Ministry of Petroleum and Natural Gas has taken some initiatives to include the petroleum products under the regime of GST in order to curb the price hike.