States will be allowed to impose taxes in addition to the peak 28% Goods and Services Tax rate on petrol and diesel if fuel prices are brought under the ambit of the tax regime, Bihar Deputy Chief Minister Sushil Kumar Modi said on Friday. He was speaking at a PHD Chamber event in New Delhi, PTI reported.
The Bharatiya Janata Party leader, however, said it would take a while for fuel prices to be brought under the purview of the new tax regime. “If petrol, diesel are to be brought into GST, then states will be allowed to levy taxes on top of 28% to prop up revenue,” Modi said. “It will take some time to include petrol, diesel in GST as the states have divergent views.” He said 45%-50% of state tax revenues are generated from petrol and diesel.
Modi said fuel prices would continue to be influenced by global factors. In May, Modi had said that bringing petroleum products under the Goods and Services Tax will not lower fuel prices.
The Centre currently imposes a total of Rs 19.48 per litre of excise duty on petrol and Rs 15.33 per litre on diesel. States impose an additional Value Added Tax to the total price.