Finance Secretary Hasmukh Adhia said the all powerful GST Council will consider bringing petroleum products under Goods and Services Tax (GST) and it could happen in phases.
Speaking on the issue, Central Board of Indirect Taxes and Customs Chairman S Ramesh said although there is demand for bringing petroleum products under GST, the GST Council will have to finalise modalities.
Currently, diesel, petrol, crude oil, natural gas and aviation turbine fuel are outside the purview of goods and services tax, and states have the right to impose value added tax on these items.
“One of the demands that is there before us, we will see… everything will happen in stages,” Adhia said at an event.
The civil aviation ministry has time and again voiced its concern on the high rate of taxes on aviation turbine fuel, which accounts for a significant chunk of an airline’s operational costs and also has a bearing on air fares.
Earlier, the civil aviation ministry had also written to the finance ministry seeking the inclusion of jet fuel under the indirect tax regime with full input tax credit at the earliest. The finance ministry has expressed its intention to include natural gas and ATF within the purview of the goods and services tax soon.
“We have done a lot but that it does not mean that there is no scope for betterment of the existing system. We still believe that we need to do a lot more and we are working in that direction,” Adhia said.
On the issue of automation of refund, he said it was meant to be automated right from day one but unfortunately people made so many mistakes in filing return that the income-tax department had to get into manual mode at the last moment.
“We are again trying to make it completely automatic, the entire refund process. This is next thing. In terms of simplification of rates, slabs, we do understand need for it but we did what was best in the given scenario.
“We could not have done anything other than this because we had to take care of revenue, we had to take care of concern of poor. Certainly we must move in that direction of something better than that,” the secretary said.
The GST currently has four slabs –5 per cent, 12 per cent, 18 per cent and 28 per cent. The GST Council, in November, had reduced the tax rate on 178 items from 28 per cent to 18 per cent.