Economy

Centre, States must work to lower fuel price: FM

Our Bureau Chennai | Updated on February 20, 2021

‘GST slab rationalisation needed’

With the petrol price breaching the ₹100-level mark in some places, Finance Minister Nirmala Sitharaman suggested that States and Centre sit together and come up with a way to maintain the pump-price at a reasonable level.

Speaking at a post- Budget discussion organised by the Chennai Citizens’ Forum on Saturday, Sitharaman said: “This is a very vexatious issue, and no answer, except reducing the price, will convince anyone.”

Oil marketing firms

There is revenue generation happening both by the Centre and the States. With OPEC predicting production to come down, there will be further pressure on petrol price. If all this is reality, it is the oil marketing companies that have to decide on whether they have to cut it (price) or hike it because (technically), oil prices have been freed. Asked if GST will be an answer, Sitharaman said it can be, but even to bring the fuel under GST there needs to be a discussion in the GST Council and consultation among States... But once they agree on a rate there can be just one tax that can be shared by both the Centre and the States rather than the States having their own and the Centre its own, she said.

On whether GST rates will be rationalised, Sitharaman said rationalisation should come.

“We have ended up with an inversion problem. Raw materials have been taxed higher than the finished goods. I was astonished to see in some items, we are giving more refunds than they get taxed. How is that? How can I justify that? Rationalisation is required so that the end consumer does not have too many slabs and inversion tax,” she said.

 

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Published on February 20, 2021
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