Goods and Services Tax (GST)

Centre cuts GST rates on oil exploration & production

Note4students

Mains Paper 3: Economy | Mobilization of resources

From UPSC perspective, the following things are important:

Prelims level: GST- included and excluded items

Mains level: Implementation of GST and its aftereffects


News

Oil exploration and production under GST regime

  1. Setting the stage for inclusion of some of the petroleum products in the Goods and Services Tax (GST) regime, the government has reduced GST rates for exploration and production sector
  2. This is to reduce the cascading effect arising on account of non-inclusion of petrol, diesel, aviation turbine fuel, natural gas and crude oil

Why should petroleum products be brought under GST?

  1. The exclusion of petrol, diesel, crude, natural gas and ATF from GST increases the cost of these products
  2. This is because input GST not being creditable against the sale of these products adds to the cost of these products
  3. Further, excise duty / VAT payable on sale of these products is not available as credit to industries buying these products

Way forward

  1. GST Council should consider inclusion of some of the left out petroleum products for complete benefit for the sector than taking these ad-hoc relief measures

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