NEW DELHI: The Confederation of Indian Industry (CII) has called for inclusion of petroleum and natural gas under GST at the earliest. Till such time this is done, C Forms should be continued to avoid high tax incidence on these products, CII added.
“Though the understanding is that the previous VAT and CST rules would continue to apply to the excluded products, the related sectors continue to incur huge GST impact on all inputs without any set-off, as sale of crude oil and natural gas are outside the purview of GST and subject to existing OIDA (Oil Industry Development Act) cess, Central Sales Tax Act and State Value Added Tax,” the release said.
After introduction of GST, credit on VAT paid on petroleum products including natural gas is not available and the amendment of the CST Act has significantly altered inter-state sale of the products, CII said.
“Therefore, post GST, there has been an increased tax cost on the products, which was not the intent of the government,” it added.
CII has earlier suggested that petroleum products, natural gas, electricity, alcohol and real estate be covered under GST. This, according to CII, would ensure that the input taxes received set off credits and there are no stranded costs.