Why can't petrol, diesel be brought under GST: Sushil Modi explains in RS

New Delhi, 24 March While debating the Finance Bill 2021 in the Rajya Sabha on Wednesday, Bharatiya Janata Party (BJP) MP Sushil Modi explained the reason behind not bringing petrol and diesel prices under the GST.

He said for the next eight to 10 years at least, petrol and diesel cannot be brought under the GST. The Bihar BJP leader alleged that opposition leaders strongly oppose GST on the streets but when the GST Council meeting takes place, not a single Chief Minister or Finance Minister has ever opposed the GST structure?

"If the income generated from diesel and petrol is being spent in the development of the country, then what is the problem?" asked Modi. Modi said if the petrol or diesel costs Rs 100, a tax of Rs 60 is levied. Of this Rs 35 is received by the Central government and Rs 25 by the states.

Speaking in the Rajya Sabha on Wednesday, Modi said, "One thing which repeatedly comes up is that petrol and diesel prices be brought under the GST slab. If petroleum products are brought under GST, where will the states go to compensate for the loss of more than Rs 2 lakh crore to Rs 2.5 lakh crore every year? The Centre and the states get nearly 60 per cent of the revenue from petrol and diesel and receive Rs five lakh crore per year."

He said the highest tariff under the GST is 28 per cent, while at present 60 per cent tax is being levied on petrol and diesel. In such a situation, if petrol and diesel were brought under the GST, then from where will Rs 2 to 2.5 lakh crore be compensated?

Modi further said,"Whether it is the Congress or the BJP , no government is willing to compensate for a loss of Rs 2.5 lakh crore. It is not possible that in the incoming 8-10 years, petrol and diesel can be brought under the GST."

Modi also targeted the opposition parties for opposing the GST. He said,"Some people ridicule GST as 'Gabbar Singh Tax'. If you have the courage, then oppose it in the GST Council meeting where leaders from all states are present. So far no Chief Minister and Finance Minister has opposed the GST structure in the GST Council meeting."

Higlighting the benefits of the GST, Sushil Modi said in the Rajya Sabha that there are no check posts on the borders today which has helped in saving a lot of time. During the implementation of GST, the opposition parties had staunchly opposed it.

Citing the example of Canada, one of the opposition parties had said that there was a lot of opposition to the introduction of GST in 1992 there and the ruling party lost when elections were held. It was said that the Narendra Modi government would have to suffer the same fate.

But during the state Assembly elections held after GST implementation, the Modi government was re-elected to power with a massive majority. In Surat, where GST was opposed the most, the Congress could not win even a single seat during the Gujarat Assembly elections.