Amid the uncertainity of the passage of the GST Bill in the parliament, Chief Economic Advisor Arvind Subramaniam has apparently came up with a win-win model to address the issue of including petroleum products in the proposed Goods and Services Tax (GST) list and said that Petrol and other petroleum products would not be brought under the GST regime for some time after its roll out. He said that “Constitutionally petrol and other petroleum products will be within the GST system. But it would be out of the GST dispensation after its implementation for some time”.
He said that the states will have the freedom to determine the tax rate and can levy the Value Added tax (VAT). He had earlier said that there was “an understanding that the 300 (existing exemptions) will come down to 90 for both the Centre and the states…there seems to be a broad political consensus on this.” Subramaniam said that the GST council would decide for how long these products would be out of the new taxation regime. He also pointed that Union Finance minister Arun Jaitley had said that the government was hoping that the GST Bill would be passed soon.
Subramaniam outlining the benefits of GST, said that it would give the country a wider tax base and ‘Make in India’ drive would get an impetus, however he also added that no single reform could determine the long-term growth of the country.
Meanwhile, the government had said that it is unable to predict a timeline for the passage of the GST Bill, currently stalled in the Rajya Sabha because the ruling NDA does not have the required numbers in the upper house of parliament.
