Estimation by SBI Financial Experts
Mumbai: SBI economists have said that bringing oil products under the Goods and Services Tax (GST) would bring down the price of petrol to Rs 75 per liter in the country. However, he said politicians were not ready for this and hence fuel prices in the country were at record levels. ‘VAT and taxes levied on petrol and seeds are the main sources of revenue for the Center. Therefore, the Center and the states are not willing to bring oil prices under GST. At present, the Central and State Governments are levying various taxes and charges on petrol, diesel, transport charges, dealer commission, excise duty, cess and VAT.
Transport charges on a liter of petrol are Rs 3.82, dealer commission Rs 3.67 and cess Rs 30. Transport charges on diesel are Rs 7.25, dealer commission is Rs 2.53 and cess is Rs 20. If these are brought under GST, the maximum tax will be 28 per cent. Bringing oil products under GST will not hurt the states. However, this will reduce the burden on consumers to Rs 30 per liter. Then petrol will cost Rs 75 per liter and diesel Rs 68 per liter, ”SBI economists said.
Bringing energy products under GST will cost the central and state governments Rs. It is estimated that the loss will be one lakh crore and only 0.4 per cent of the country’s GDP. Economists also suggested that energy prices in the country should be stabilized without making daily changes in line with international prices. That is to say, internationally it is suggested to bury the loss when the prices go up and the losses go up. They believe that doing so will not place any burden on consumers.