Finance Minister Nirmala Sitharaman is chairing the 45th meeting of the Goods and Service Tax (GST) Council in Lucknow on Friday.
This is the first in-person GST Council meeting in almost 20 months. The last meeting was held in 2019, before the pandemic.
The meeting is expected to decide on bringing petrol and diesel within the ambit of indirect tax and reducing taxes on Covid-19 medicines.
In the meeting, the GST Council could also consider taxing petrol, diesel and other petroleum products under the single national GST but the move may require huge compromises by both central and state governments. This is because both central and state government finances relied heavily on taxes on these products.
Kerala Finance Minister KN Balagopal and Maharashtra Deputy Chief Minister Ajit Pawar are against the idea to include petrol, diesel under GST.
A day prior to the GST Council meeting on Friday, Maharashtra Finance Minister Ajit Pawar had said the taxes collected from the stamp and excise duty help the states in extreme situations. The GST, of course, is a principal source of income for the state, he said.
When asked about the ongoing discussion on bringing petrol and diesel under the ambit of GST, Pawar replied that the state government had not received any such proposal.
GST is being thought to be a solution for the problem of near-record high petrol and diesel rates in the country.
While the taxes have not come down, a spike in global oil prices has pushed petrol and diesel to an all-time high, leading the demand to come under the GST.
In a reply of a petition in June, the Kerala High Court had asked the GST Council to decide on bringing petrol and diesel within the goods and services tax (GST) ambit.
Five commodities – crude oil, natural gas, petrol, diesel, and aviation turbine fuel (ATF) – were kept out of GST when it was introduced on July 1, 2017.