Indian Finance Minister Nirmala Sitharaman informed the Parliament on Monday that there is no proposal to reduce fuel taxes, including on petrol and diesel.
"At present, there is no proposal to reduce taxes on petrol and diesel", Sitharaman said in response to a question raised in Parliament.
The central government currently levies excise and value-added (VAT) taxes on fuel, while governments in Indian states impose separate taxes on these products. The price of petrol is currently a little over one dollar per litre, while the price of diesel is less than a dollar per litre across the country.
Replying to another question on whether the government intends to bring both petrol and diesel under the Goods and Services Tax (GST) regime, Sitharaman said these items were already under GST’s zero rate category.
It may be noted that in GST, zero-rated supplies are ones which are executed under Section 16 of the IGST Act. Zero rates are applicable in the export of goods or services or both, and when the supply of goods or services or both to a Special Economic Zone (SEZ) developer or unit.
Any future tax-related changes on these products would be decided by the GST Council, a constitutional body created by an Act of Parliament in 2016 that makes recommendations to the central and state governments on issues related to taxation on both goods and services, Sitharaman further stated.
The GST Council is chaired by the country’s finance minister and its members include the deputy minister of revenue or finance and ministers, responsible for finance and taxation in all states.
India is the world’s third-largest consumer for diesel used in harvesting and other farming, leading to higher levels of rural spending.