Arun Jaitley urges states to reduce VAT on petroleum products

     Written by : SMTV24x7 | Fri, Aug 18, 2017, 04:30 PM

Arun Jaitley urges states to  reduce VAT on petroleum products

New Delhi Aug 18: A new initiative may be taken soon.
Finance Minister Arun Jaitley has written to state chief ministers urging them to reduce the sales tax or VAT on fuels like natural gas that have been kept out of the GST but are used as inputs for goods that come under the new indirect tax regime. currently, the following items are kept out of GST

* Crude oil
* Petrol
* Diesel
* Natural Gas
* Jet Fuel (ATF)

The FM has urged states to cut down the tax rates because a concern being raised by the manufacturing sector in the country regarding the rise in input costs of petroleum products happening on account of transition to GST regime,".

currently, natural gas is used as input for
# Power generation
# Fertiliser
# Petrochemicals
# Variety of products like glass.

Crude oil is used to manufacture
# Petrol
# Diesel
# Kerosene
# LPG
# Industrial fuels like naphtha, fuel oil and bitumen.

Sources said that the products of these industries have become costlier because they cannot claim Input Tax Credit.

* VAT rate on Diesel varies from 17.4 per cent to 31.06 per cent.
* VAT On natural gas it varies from nil to 15 per cent.
* LPG will attract GST of 5 per cent
* Naphtha and fuel oil will be taxed at 18 per cent GST

Let's hope that States will soon agree to bring Petroleum products under GST so that inflation is curtailed.