SBI economists said that bringing petrol and diesel under the Goods and Services Tax is an unfinished agenda of the GST framework.
The price of petrol across the country may go down to a 75 liters if brought under the Goods and Services Tax (GST), but there is a lack of political will, keeping Indian oil product prices at one of the highest is. The world, economists at SBI said on Thursday.
According to calculations by economists at the global crude oil price of $ 60 per barrel, diesel will cost 68 per liter and the revenue loss for the Center and the states will be only ₹ 1 lakh crore or 0.4% of GDP. And exchange rate. 73 per dollar.
At present, every state has its own way of refueling, while the Center also collects its duties and cess. In some parts of the country, petrol prices have risen by ed 100 per liter and concern has been expressed about high taxation which is making fuel expensive.
SBI economists said that bringing petrol and diesel under the Goods and Services Tax is an unfinished agenda of the GST framework and could help in achieving prices under the new indirect tax structure.
“The Center and states are ready to bring crude oil products under the GST regime as sales tax / VAT (value added tax) on petroleum products is a major source of tax revenue for them themselves. Thus, there is a lack of political will to bring crude oil. Within the purview of GST, ”he said.
Currently, states have opted for a combination of ad valorem tax, cess, additional VAT / surcharge based on their requirements and these taxes have been levied keeping in mind the raw material, transport duty, dealer commission and flat excise duty levied. Huh. By center, he explained.
Crude oil prices and dollar rates, transport charges for 7.25 for diesel and for 3.82 for petrol, dealer commission of ₹ 2.53 for diesel and for 3.67 for petrol, cess of ₹ 30 for diesel and divided for 20 The dividend will be divided equally between the Center and the States, and the GST rate at the rate of 28%, economists came to the final price projections.
Growth in consumption – 15% increase in diesel and 10% increase in petrol – has been used to assess the fiscal impact of ₹ 1 lakh crore towards achieving petroleum prices under GST.
A $ 1 increase in crude oil prices would increase the price of petrol by about 50 paise and diesel prices by about Rs 1.50, and a total deviation under the baseline scenario would reduce by about ₹ 1,500 crore.
The states with the highest share of tax revenue at present would suffer the most, if the system shifts to GST, he said, adding that such a move would help consumers pay as little as 30 30.
Interestingly, simulation practice shows that when the price of crude oil falls below $ 10 per barrel, the Center and the state can save close to Rs 18,000 crore if they reduce the prices of petrol without giving a benefit to the consumers. Keep at prices, which is more than ₹ 9,000 crores savings when crude oil prices rise by a single measure.
“We advise the government to create an oil price stabilization fund, which can be used to compensate for the revenue loss from a well-saved cross subsidy fund, without harming the consumer,” he said.
For LPG cylinders, economists proposed increases and classified subsidies could be provided to poor consumers, which could be discontinued over a period of 5 years.
He said that there is a high possibility that the government may cancel its 49,000 crore borrowings in the last fortnight of March.