‘List reasons for not including petrol, diesel under GST’: Kerala HC tells GST council

The Kerala High Court on Monday asked the Goods and Services Tax (GST) Council why petroleum products can’t come under the GST and directed it to file a reply in ten days
Image for representation. (File photo)
Image for representation. (File photo)
Updated on Nov 08, 2021 09:58 PM IST
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The Kerala High Court on Monday asked the Goods and Services Tax (GST) Council why petroleum products can’t come under the GST and directed it to file a reply in ten days.

Hearing a public interest litigation (PIL), a division bench of Chief Justice S Manikumar and Justice Shaji P Chaly directed the GST Council to explain reasons for not including petrol and diesel within the ambit of GST.

The PIL was filed by Kerala Pradesh Gandhi Darshanvadi, a voluntary organisation, though its counsel Arun B Varghese contended that prices of petrol and diesel vary in different states as tax levied by them was different and sought a uniform tax regime for petroleum products. It also cited that though the union and state governments plead helplessness in this citing petroleum marketing companies, both enthusiastically participated in the reduction of fuel price prior to elections.

“Now different rates are being charged in different states and same is due to a different rate of tax levied by the state governments under their fragmented taxing policies. This is an impediment to harmonised national market as contemplated under Article 279(A) 6 of the constitution,” the PIL said. It also said the state and central taxes will account for at least 60 per cent of the price of one litre of fuel.

If petrol and diesel are brought under the GST, there will be a harmonious market throughout the nation and the maximum taxable rate will be 28%, it said, adding that even people who are not direct consumers of fuel are affected by the unprecedented price hike.

“A welfare state must be the one where everyone is in a position to bear expenses of basic amenities. The unprecedented hike in fuel prices push the public to immense hardships by which their right to life guaranteed under Article 21 is violated,” it said.

Respondents in the PIL are the Union of India, Kerala Government, Petroleum Secretary, Goods and Service Tax Council and three major oil companies.

The Centre and the GST Council can’t argue that if the fuel was included in the GST, it would have serious implications on revenue collection. A constitutional duty was cast upon the GST Council to make a serious recommendation to include both (petrol and diesel) under the GST, the PIL said. “To declare the non-inclusion of petrol and diesel under the GST regime are violative of the Article 14 and 21 of the constitution,” it said.

The PIL was first filed in July but it was withdrawn later after the court pointed out some glitches and they were corrected in the new one which was readily admitted by the court, said the counsel. Earlier, the counsel for both union and state governments opposed the PIL saying the fuel price regime was part of a policy decision and the judiciary can’t intervene.


    Ramesh Babu is HT’s bureau chief in Kerala, with about three decades of experience in journalism.

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