Why these petroleum products kept out of GST ambit by Central Govt?

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Petroleum is one of the most taxed product in India, the reason being it has a very high inelasticity of demand. Meaning that price does not drive consumption. Lower prices do not make people go on and on for long drives and higher prices do not make us walk to work everyday.

The GST taxation meetings by finance ministry of GOI & respective States have exempted 5 Petroleum products out of GST law they are Crude oil , Motor spirit , HS disel, aviation turbine fluids & natural gas at present . This means transportation charges doesn't have any significant changes.

So Oil companies have right to implement the charges as per the production costs . when GST fully implemented there are high chances of steep decline in prices by 25 % - 35% . This might be a boon to consumers on a large scale .

 Why petrol and diesel prices are not brought under GST. Now for petrol and diesel the central exise duty is 23% and state VAT is 34%. Total tax is 57%. If these essential products are brought under GST , the maximum tax will be only 28%, which means the prices of petrol and diesel can come down by almost 25-35%. The public at large will be benefited. Please spread this message .

Petro-product prices vary from state to state owing to difference in state taxes. If these taxes become uniform, the price differences due to this will go away. It is still an open question if petroproducts will be brought under GST, if and when it is implemented.

The petroleum dealers are asking the govt to include Petrol/Diesel in ambit of GST because then we will have uniform price all over India. This will help to stop cross border smuggling and adulteration which results from it. However govt has not shown any positive decision in this regard.

We people need petroleum products under GST.  If GST is introduced for the best of people, then the first thing the government should added is Petroleum products. It will gradually reduce all the inflation rates.