GST on petroleum products will cut fuel taxes: Gadkari

Bringing petrol, diesel and other petroleum products under the single nation-wide GST regime will reduce taxes on these products and increase the revenue of both the Centre and states, Union Minister Nitin Gadkari said on Wednesday.

Finance Minister Nirmala Sitharaman will definitely try to bring petrol and diesel under GST if she gets the support of the state governments, said Gadkari while addressing the Times Now Summit virtually.

"In the GST Council, finance ministers of states are also members.

"Some states are against bringing petrol and diesel under the GST regime.

"If petrol and diesel will be brought under the GST regime, then taxes on these products will be reduced and revenue of both the Centre and the states will increase," Gadkari, the Union Minister for Road Transport and Highways, said.

The GST Council on September 17 had decided to continue keeping petrol and diesel out of the GST purview, as subsuming the current excise duty and VAT (value-added tax) into one national rate will impact revenues.

Including petrol and diesel under GST will have resulted in a reduction in near record-high rates.

Sitharaman, after the GST Council meeting in Lucknow, had said the Council discussed the issue only because the Kerala High Court had asked it to do so but felt it was not the right time to include petroleum products under GST.

"It will be reported to the High Court of Kerala that it was discussed and the GST Council felt that it wasn't the time to bring the petroleum products into the GST," she had said.

Replying to a question on the Centre's recent decision to cut excise duty on petrol and diesel by a record Rs 5 and Rs 10 per litre to help bring down rates down from their highest-ever levels, Gadkari said the government has taken a good initiative to provide relief to the common man.

"The way the Centre has provided relief to the common man (by cutting excise duty on petrol and diesel by Rs 5 and Rs 10 per litre, respectively), there is an expectation that the states will also cut taxes (VAT rates) on diesel and petrol to provide relief to the common man," he said.

Buckling under pressure, the government on November 3 cut excise duty on petrol and diesel by a record Rs 5 and Rs 10 per litre to help bring down rates from their highest-ever levels.

Several BJP-ruled states and Bihar, where the BJP is part of the ruling coalition, also reduced VAT rates, giving further relief to consumers.

In recent months, crude oil prices have witnessed a global upsurge. Consequently, domestic prices of petrol and diesel had increased in recent weeks, exerting inflationary pressure.

Reacting to allegations that the government cut excise duties on petrol and diesel keeping in mind results of the 30 assemblies and three Lok Sabha by-elections, Gadkari said: "For us, politics is an instrument of socio-economic reforms. And, we don't do politics to win elections."

He said the Indian economy is growing and the country has huge investment potential.

"We need good infrastructure. We are constructing 38 km of highways a day," said Gadkari adding that the government has given high priority to good infrastructure.

Asked about the quality of roads built by state-owned National Highways Authority of India (NHAI), Gadkari said his ministry is corruption-free, nobody has any allegation to make against him or his officials.

"Just because accidents happen, we can't say that the quality of road is bad," he added.