GST Will Not Solve Problem of High Prices of Petrol and Diesel
In the recent past, suggestions have been made to bring petrol and diesel under the ambit of Goods and Services Tax (GST). Actually, petroleum products are already under the ambit of GST, unlike alcohol, real estate and electricity. It's just that currently they are taxed at 0% under GST, and hence, no tax is collected. Given this, in order to start taxing petrol, diesel, etc., under the GST, only a consensus of the GST council (a body which primarily consists of the finance minister of the central government and the finance/taxation ministers of the state governments) is required. In order to understand how taxing petrol and diesel under the GST will make a difference, we first need to take a look at the current pricing mechanism. Let's consider the price of petrol in Delhi today, i.e., June 13, 2018. The retail price of non-branded petrol is Rs 76.43 per litre. Table 1 tells us how we arrive at this price. Table 1: Price build-up of petrol (in Rupees) Pric...
