[Maverick_4662]

Originally Posted by Raghu M

The part that the states will lose a chunk of their income is to be blamed. They will simply go against the center's directives or even go to the Apex court. It will open a Pandora's box. So, the BJP plays it safe here. We want to do it, but they aren't cooperating. Although the BJP would want the current prices to run for at least another year to fund all the ambitious projects. I am just giving a layman view but that is the high level picture.

It is actually true that the states will lose a huge chunk of their revenues. Our's is a Federal democracy and the GSTC was touted as the flagbearer of cooperative federalism, So I respectfully take exception to the part about directives. Both the union and the states would very much like the present regime to continue as it is favorable to both their financial health. Just that the union has control over the narrative so it is much easier to shift blame than to acknowledge the issues which the GST regime has brought and try to work it out by consensus. Which is actually true about any of the failings of the government. The handling of the 2nd wave of COVID for example.
Also, if the states feel shortchanged by any action of the union, It is in fact their right to approach the apex court, Which has original jurisdiction over disputes between states and between the centre and state.( Article 131 of constitution). This is normal democratic process which we should be proud of and not look down upon.

I apologise for the seemingly political posts. I am a pragmatist and don't associate with any party or ideology. A spade is a spade and a hoe is a hoe.

[thanixravindran]

Originally Posted by RaghuVis

I feel, by the time fuel comes into GST, electricity will move out of it considering EV is the direction we are moving into.

Fun fact: Electricity (energy charges)is not part of GST since the start of GST regime

[AutoDowntowner]

and the states will not agree upon it. That's the bitter truth.

[anb]

The graph shows how much each state gets back for every rupee given to Delhi. Some states get only 25 paisa for every rupee given to Delhi while some other state gets 1.79 rupees for their 1 rupee contribution. If the minimum return is 75% of what they give to Delhi, most states will agree for the GST in Petrol & Diesel.

[discoverwild]

I believe many here are missing the forest for the trees. Just look at GST arrears that need to paid by the Central Government to various states and the delay in disbursement of the same. The last arrears paid was ₹86,000 Crores. That was about 4 months ago, if I recall correctly. So, more dues have piled up over the last 4 months.

Fuel taxes are a major source of direct revenue to the State. How would States function if their rightful dues are not settled on a timely basis? You need 3 meals a day. You can't starve for 9 days and then eat 30 meals on the 10th day.

This is precisely the reason why States are unwilling to move fuel under GST. It doesn't matter which party is in power.

[Raghu M]

Originally Posted by Maverick_4662

It is actually true that the states will lose a huge chunk of their revenues. Our's is a Federal democracy and the GSTC was touted as the flagbearer of cooperative federalism, So I respectfully take exception to the part about directives. Both the union and the states would very much like the present regime to continue as it is favorable to both their financial health. Just that the union has control over the narrative so it is much easier to shift blame than to acknowledge the issues which the GST regime has brought and try to work it out by consensus. Which is actually true about any of the failings of the government. The handling of the 2nd wave of COVID for example.
Also, if the states feel shortchanged by any action of the union, It is in fact their right to approach the apex court, Which has original jurisdiction over disputes between states and between the centre and state.( Article 131 of constitution). This is normal democratic process which we should be proud of and not look down upon.

I apologise for the seemingly political posts. I am a pragmatist and don't associate with any party or ideology. A spade is a spade and a hoe is a hoe.

No need to apologize sir. You gave your view and it was put forward in a very progressive way. Just hope everyone looks at issues the same way. What is there is there, simple! Thank you.

[tj123]

Originally Posted by anb

The graph shows how much each state gets back for every rupee given to Delhi. Some states get only 25 paisa for every rupee given to Delhi while some other state gets 1.79 rupees for their 1 rupee contribution. If the minimum return is 75% of what they give to Delhi, most states will agree for the GST in Petrol & Diesel.

Wow data shows clear bias against the Southern and opposition ruled states. I don't want to sound political but the data speaks for itself. No wonder these states will never agree to any move which the central government proposes.

[trippytragopan]

More the taxes on petroleum products...Faster the transition towards electric mobility. 😊

[navrddy]

As per recent Lok Sabha Address, Pending dues from many States for GST compensation Refund is due to Non-certification from CAG to States. Many states did not submit CAG certificate for Release of Funds from Centre Government.
Please correct me, if i,am wrong or incorrect on this topic

[Maverick1977]

Wow, what intellectual discussions. Quite enlightening BUT the moot question is - Will this reduce the prices? And if so by how much? It should not be the case when GST on food went down to 5%, but restaurants just jacked up the prices citing no input tax credit. Will we see something similar by the Govt.

[Figo0202]

Most of the states will never agree to bring petrol and diesel under the GST as the tax collection from petrol and diesel is one of the bigger source of their income. This bigger question is if they are indeed bought under the GST bracket will the benefit be passed to end consumer.

One interesting thing to see is response of state govt. like Punjab how they react to this development and will they support it or protest against it as its the case always.

[GTO]

Mod Note: Please continue discussing the tax & revenue implications, but no posts on politics / political parties / politicians please. Thanks for the support & understanding

[Maverick_4662]

Originally Posted by Maverick1977

Wow, what intellectual discussions. Quite enlightening BUT the moot question is - Will this reduce the prices? And if so by how much? It should not be the case when GST on food went down to 5%, but restaurants just jacked up the prices citing no input tax credit. Will we see something similar by the Govt.

Highest GST slab is 28% which includes CGST and SGST. This is much lower than the over 100% Taxation in most states right now. So yes, if implemented in good faith , prices will come down. But practically I don't see that happening. At most I expect a token inclusion with cesses or surcharges to make up for the losses.

[antonylejos]

When cars came under GST we expected prices to reduce. Then they introduced surcharge over and above GST for cars, and kept prices almost same.

Rest assured, even if Petrol & Diesel come under GST, prices will not reduce. You can trust India's government on that.

[thanixravindran]

Originally Posted by Maverick_4662

Highest GST slab is 28% which includes CGST and SGST. This is much lower than the over 100% Taxation in most states right now. So yes, if implemented in good faith , prices will come down. But practically I don't see that happening. At most I expect a token inclusion with cesses or surcharges to make up for the losses.

Originally Posted by antonylejos

When cars came under GST we expected prices to reduce.
Then they introduced surcharge over and above GST for cars, and kept prices almost same.

Rest assured, even if Petrol & Diesel come under GST , prices will not reduce. You can trust India's governement on that.

GST implementation in a complex country like us was possible due to 2 factors -

1. Revenue neutral rate i.e. no loss of revenue for governments from previous system.

2. Compensation for revenue loss for states as it transitions from manufacturing tax to consumption tax at source collection point.

So it is a pipe dream that taxes will be reduced in GST regime.

With GST, advantage for businesses, is it creates a unified market. So essentially, there is nothing for the end customer like a tax reduction or anything. We still need to move up in per capita income and domestic consumption increase to think about a possibility of tax reduction.