Bring petroleum products under GST ambit: BCIC

Our Bureau Bengaluru | Updated on April 05, 2018

It is the right time to bring petroleum products under GST ambit, Bangalore Chamber of Industry and Commerce (BCIC) has said.

The Chamber sought the intervention of the GST Council to immediately plug the sky-rocketing petroleum prices. In the two-month span, petrol prices have increased by ₹15 per litre in Bengaluru while it is much higher in other parts of the country.

Raju Bhatnagar, Secretary General, BCIC, said: “Since it is well within the executive powers, the GST Council in its forthcoming meeting in the second week of April, should bring petroleum products under the ambit of GST. In our view, this is the only way out to offset the increase in prices of petrol and diesel.”

“BCIC has maintained that the inclusion of petroleum products in GST regime will result in giving the economy a boost, which will be sharply accentuated with the rollout of e-Way bill starting April 2018 pan-India,” he added.

Crude prices have surged recently because of the decision by oil-producing countries to reduce production. Currently, taxes on petroleum products constitute nearly 50 per cent of the retail prices.

According to Bhatnagar, higher domestic prices are considered negative for heavy oil importers such as India. This often has a cascading effect on inflation, limits the ability for rate cuts by the central bank and increases demand for foreign exchange.

A sharp recovery in global crude oil prices, which is up 47 per cent since July 1 last year, is estimated to have expanded India’s oil import bill to $88 billion in 2017-18 from $70 billion in the previous year. India imports nearly 82 per cent of its oil requirement.

Published on April 05, 2018

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