New Delhi, May 20: Rajya Sabha MP Dr. Sasmit Patra recently met with Union Finance Minister Nirmala Sitharaman to present a detailed proposal advocating for the inclusion of petrol and diesel under the Goods and Services Tax (GST). He called for a structured and comprehensive national discussion on this pressing issue.
Dr. Patra emphasized that Article 279A(5) of the Constitution already provides for the inclusion of petroleum products in GST in the future. He noted that while this topic has been discussed in the GST Council previously, the current economic conditions necessitate a fresh and balanced approach.
The MP pointed out that the prices of petrol and diesel directly impact inflation, transportation costs, logistics expenses, agricultural costs, operational costs for the MSME sector, and the daily lives of ordinary citizens. He highlighted that varying VAT rates across different states hinder the achievement of tax uniformity and a unified market under GST.
Using Odisha as a specific example, he stated that the state is a significant hub for mining, industry, and logistics activities. If petrol and diesel are gradually included in GST, it could lower freight and supply chain costs, enhancing the competitiveness of industries and providing relief to the general public, farmers, transport operators, and the MSME sector.
Dr. Patra acknowledged that the tax revenue from petroleum products is a vital income source for states. Therefore, he suggested adopting a balanced and phased model for inclusion rather than an immediate and unconditional transition to GST.
He proposed that the GST Council consider separate GST slabs for petrol and diesel, transitional compensation for states, a limited-duration revenue protection cess, and a defined formula for financial stability.
The MP urged the Finance Minister to facilitate extensive discussions with all states and to form a technical and financial expert group. This group would study the phased inclusion of petroleum products in the GST framework and work towards achieving national consensus.
Dr. Sasmit Patra concluded that the decision to bring petrol and diesel under GST would not only represent a tax reform but could also serve as a significant step towards economic balance, industrial competitiveness, and relief for the common people.
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