top of page
  • Writer's pictureThe team

Petroleum products will be brought under GST, no impact on states’ earnings: Pradhan

Oil minister Dharmendra Pradhan today said petroleum products will be covered under the new Goods and Services Tax (GST) regime and the inclusion will not negatively impact the earnings of state governments concerned. The new tax regime, expected to kick in from 1 July, seeks to streamline the taxation system by cutting down exemptions and establishing a seamless market across the country. However, crude oil, petrol, diesel, jet fuel and natural gas have been temporarily excluded in order to prevent any disruption in states’ revenue in the initial years. “We will include petroleum products in GST soon. We are currently working towards it. A preliminary analysis done by our ministry shows that the state governments’ concerns over losing out on revenue will not be the case. On the contrary, they will benefit,” Pradhan said here at the official contract signing ceremony of Discovered Small Fields (DSF). Finance Minister Arun Jaitley had last week clarified petroleum products would be within the purview of GST but they would continue to be taxed based on the current taxation regime until the GST council agrees on their inclusion. Pradhan said the government would also ensure the petroleum sector benefits from the new taxation system. Earlier this month, Parliamentary Standing Committee on Petroleum and Natural Gas chaired by Prahlad Joshi, a Bharatiya Janata Party (BJP) MP from Karnataka, had said upstream oil firms including Oil and Natural Gas Corp (ONGC) and Oil India (OIL) will face substantial additional tax liability under the proposed GST regime. Pradhan also informed the oil ministry will soon bring a new policy to incentivize Enhanced Oil Recovery to boost domestic output and meet the target set by Prime Minister Narendra Modi to cut down India’s import dependence for energy by 10 per cent by 2022. The ministry also plans to soon launch the second round of the DSF auctions.

17 views0 comments
bottom of page