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BENGALURU: Industry body, the Bangalore Chamber of Industry and Commerce (BCIC), along with trade and business associations, on Thursday urged the Centre to bring petroleum products under GST as there has been a steep rise in the retail price of petrol and diesel in the past one month.
“The Union Government is contemplating announcing a stimulus package to spur industrial growth which is facing headwinds, some of which are on account of reform measures that have been announced by Modi administration. As even, RBI has downgraded, the short-term growth forecast from 7.3 percent to 6.7 percent for FY 2017-18 , it will only be appropriate that Petroleum Products come under GST ambit. It is widely expected that with the inclusion of Petroleum products under GST, the prices will reduce the inflationary pressures considerably and have a beneficial cascading impact on the economy as a whole,” BCIC secretary general Raju Bhatnagar said in a statement.
Petroleum Minister Dharmendra Pradhan has also suggested that petroleum products prices be included in the GST so that fuel prices get rationalised. Bringing petroleum products under the GST regime will make fuels cheaper as VAT and Excise duties get subsumed. The combined effect of taxation on petroleum products by the Centre and the State governments is that the prices of petrol and diesel have gone back to 2014-level while the crude oil have become cheaper by little less than half hovering around US $ 50 a barrel, the BCIC statement said.
In Mumbai, petrol prices touched Rs 80 a litre while in Delhi, it is over Rs 70 per litre where as in Bangalore it touched Rs. 72 before the excise duty reduction of Rs. 2 recently. Various reports indicate that if petrol is brought under GST, it may cost as little as Rs 38.10 in Delhi at 12 per cent GST rate. According to data released by the Indian Oil Corporation for the petrol price build up in Delhi, the fuel costs only Rs 26.65 at the refineries. Dealers get a litre of petrol at Rs 30.70. But, petrol is sold at Rs 70.39 a litre in Delhi. This means Rs 39.41 is charged as tax component and dealer’s commission on every litre of petrol sold in the national capital.
“Over the last three quarters the economy has been seeing a downturn due to delayed monsoon arrival and slowing of corporate boardroom decisions. It would be preferable if prior to announcement of an economic stimulus package, as a first step it should consider bringing Petroleum products under GST ambit. This is likely to have an immediate positive impact on the economy and give a fillip to the Index of Industrial Production (IIP),” the Secretary General said.