Newly appointed CII president Sanjiv Puri on Thursday said that bringing petroleum products, electricity, and real estate under the purview of the goods and services tax (GST) should be expedited in consultation with the GST Council. He said besides this, the next set of GST reforms such as bringing GST under the three-rate structure with moderation of rates should also be closely watched.
"To facilitate India’s engagement with the GVCs, a three-tier import duty structure should be considered, with raw materials at the lowest rate followed by intermediates and then the finished goods," he said on Thursday.
He added that the capital gains tax must also be rationalised, which is part of the 14-point agenda of the new government.
"On direct taxes, the government may consider laying down a road map for rationalising and simplifying the capital gains tax and TDS provisions," Puri said while addressing the press for the first time after taking over as the CII president last month.
On Tuesday, while taking charge as the new Union Oil Minister, Hardeep Singh Puri said that the Ministry of Petroleum and Natural Gas (MoPNG) will work on bringing petrol, diesel, and ATF under the goods and services tax (GST).
Asked about imposing GST on these fuels, Puri said, “We will try. The Minister of State (Suressh Gopi) and I will both work on it.”
To levy GST on petrol, diesel, and aviation turbine fuel (ATF), the MoPNG has to make a recommendation to the Finance Ministry, which in turn will present the same at the meeting of the GST Council.
Petrol and diesel are excluded from GST. They are subject to VAT, central excise duty, and central sales tax. States determine their individual tax rates for these fuels like natural gas and aviation turbine fuel (ATF).
The Centre imposes central excise duty and sales tax on the base rate of petrol while the dealer's income on petrol comes under VAT imposed by the state.
Last year in February, Finance Minister Nirmala Sitharaman discussed incorporating petrol, diesel, ATF, natural gas, and some petroleum products into GST during a post-Union Budget conference in New Delhi.
The minister had clarified that the GST on petrol will only be implemented after the states agree. At that time it was reported the Center would develop a GST policy for crude oil and petroleum products once the state sets a tax rate for crude oil.