Union Finance Minister Nirmala Sitharaman on Friday said the rising petrol and diesel prices had become a ‘dharmasankat’ (a big dilemma) for the BJP-led central government. She admitted rising fuel prices as a burden on the citizens but called for Centre-State talks on the issue to lessen the load.
“The government is in a state of dharmasankat [a big dilemma],” said Nirmala Sitharaman at a press conference in New Delhi responding to a question on cutting the prices of petrol and diesel.
The finance minister said she understood the need of consumers of the country “but in this case, there is a ‘condition of direness’ in front of the government”.
“The Centre charges ₹32 per litre (as taxes on petrol). We charged ₹32 per litre when the fuel price was $19 per barrel and we are still charging the same even when the price rose to ₹75 per barrel. With this ₹32 per litre, we provide free ration, free housing and Ujjawala, among several other schemes, to the people,” Petroleum Minister Hardeep Singh Puri said.
Tax experts said bringing petro products under GST will be a tough call for both the Centre and states as both will stand to lose. The BJP-ruled states like Gujarat will be a loser even if a product like natural gas is brought under GST as it gets a lot of revenue from taxing the local production and import of the fuel (LNG).
The Centre will also lose as the majority of the ₹ 32.80 per litre excise duty on petrol and ₹ 31.80 on diesel is made up of cesses, which it does not share with the states. Under GST, all revenues will be split 50:50 between the Centre and the states.
