Kerala High Court asks reasons for not including petrol, diesel in GST

Kerala High Court

The Kerala High Court on Monday asked the Goods and Services Tax (GST) Council why petroleum goods are not subject to the GST and gave 10 days to reply. A division bench of Chief Justice S Manikumar and Justice Shaji P Chaly heard a public interest litigation (PIL) and ordered the GST Council to explain why petrol and diesel were not included in the GST’s scope.

The petition was submitted by Kerala Pradesh Gandhi Darshanvadi, a voluntary organisation, though its counsel, Arun B Varghese, has said prices of petrol and diesel varies in different states due to different tax rates, and that an unified tax structure for petroleum products is needed.

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It further stated that, despite the fact that the federal umion and state governments declared helplessness in this matter, both eagerly cooperated in the reduction of fuel prices ahead to the 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.

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It also stated that state and central taxes will make up at least 60% of the price of a litre of petrol. It added that bringing petrol and diesel under the GST will create a more stable market across the country, with a maximum taxable rate of 28 percent, and that even people who are not direct consumers of fuel would be 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.

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The Union of India, Kerala Government, Petroleum Secretary, Goods and Service Tax Council, and three major oil firms are mentioned as respondents in the PIL.

The PIL was first filed in July, but it was then withdrawn when the court pointed out some flaws, which were fixed in the new one, which was readily accepted by the court, according to the counsel. The counsel for both the union and state governments had previously rejected the PIL, claiming that the fuel price regime was a policy choice over which the judiciary had no power to intervene.

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