21 October Thursday
LPG, taken into GST ambit since 2017, has witnessed hike 10 times in the past 10 months

If GST Be Allowed, Petrol Will Go LPG Way; Cooking Gas Hike Rs 290

Special CorrespondentUpdated: Wednesday Sep 22, 2021

Kochi : The LPG hike spree contradicts claim that petrol prices will reduce if GST be adopted.  LPG, put on GST since 2017, has witnessed price hike 10 times in the past 10 months. Cooking gas that cost Rs 603.50 in November 2020 now stands at Rs 894 i.e. a neat hike of Rs 290.50. Commercial gas was hiked by Rs 227 over past three months alone. These figures shed lights on the sham propaganda that petrol, diesel prices will reduce if put on the GST list.

The retail price on petrol and diesel takes into account the base cost,  dealer commission and GST. To up prices, each month, the Centre hikes the  base price of fuels.  And, neither the central government nor the oil marketing companies clarifies  what the basic rate really is.  Domestic cylinder attracts GST of 5 percent and commercial cylinder, 18 percent.  Earlier states levied 4.04 percent tax on domestic cylinder. That figure rose by Rs 32 in 2017 when GST came into being.

Even if petrol and diesel be put on GST, tax gets computed on the base price and the higher slab of 28 will apply. The  strategy of upping base rate will continue then too.

Fuel prices are high owing to inflated tax levied by the centre and seeking to hide that fact, it shifts blame on states. The base price of petrol is Rs 39  and the centre levies Rs 32.90 in tax on this. If GST of 28 percent is applied, the state will earn Rs 5.46 per litre. Also, the centre is irregular on its payment of  GST loss compensations to the states.

If the fuel prices must come down, the centre should decrease  excise tax and various cesses it leveis on  them. and the Centre is unclear if it will do that if GST be allowed.