Petrol, Diesel under GST Regime: HC Asks Centre to Decide

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The Kerala government asked the Central Board of Revenue (CBR) to take a decision on bringing petrol, diesel under GST regime and proposed that the matter be transferred to the GST appellate tribunal.

Chief justice S Mani Kumar and justice Shaji P Chaly demanded that the government should decide on the representation of the petitioner within six weeks from the date of service of this letter on behalf of the government about the GST Registration of petroleum products.

Petrol, Diesel under GST Regime

The petition has sought that the Union government unify the tax on petrol, diesel under GST regime through the order and subsequently make it uniform across the country. It has also sought retailers from raising prices of goods sold in shops and commercial establishments beyond the basic price limit for a month from the date on which the code relating to the levying of the tax is communicated to all state government departments monthly.

The petition has also sought action against erring retailers and third-party vendors for selling manufactured goods at higher prices than the market price on the assumption that such a business model enables them to get away with selling more.

The petitioner also stated that It is true that the price of petrol and diesel has been hiked several times during election periods. However, it is also true that pure logic dictates that the government should not intervene in the prices of essential goods such as fuel, which are procured at regulated retail prices and sold at regulated wholesale prices. The consumer is the ultimate consumer. And asked for the GST Return Filing.

Problems with the current Petrol & Diesel Prices

Whether the central and state governments should be involved in the price determination and control is a difficult and sensitive issue. Whether a particular business or industry should be allowed to set its own profit margin is equally problematic.

Fuel price regulation is one area where the state and central governments come into play. State governments can influence industrial prices by implementing price controls, which have the potential to reduce profits and increase unemployment.

The government opposed the petition because it did not fall within the ambit of the court’s jurisdiction. For their part, the petitioners contended that the issue pertained to issues of collective responsibility and fell under the ambit of the State’s power to regulate trade and industry as guaranteed in the Constitution.

GST on fuel: A price vs revenue trade-off

If you want any other guidance related to GST Registration or GST Return filing, please feel free to talk to our business advisors at 8881-069-069.

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