BENGALURU/KALABURAGI: The Karnataka GST team asked the Union government not to include petrol and diesel under GST for now and sought the extension of GST compensation for another five years.
The team participated in the 45th GST Meeting at Lucknow in Uttar Pradesh on Friday. The team, which was normally headed by Chief Minister Basavaraj Bommai, was this time fronted by C Shikha, Commissioner of Commercial Taxes. It consisted of Additional Commissioner, Commercial Taxes, Ravi Prasad and other senior officers. Its suggestion not to include petrol and diesel under GST was supported by most states and the Centre at the meeting.
It also wanted the extension of compensation to Karnataka for five more years on the grounds that revenue collection has been a challenge because of Covid and other reasons. Union Finance Minister Nirmala Sitharaman did not commit herself to the demand, but agreed to constitute two committees to look into the issue. One of the committees will study tax restructuring and the other will analyse IT systems for better enforcement.
The Centre’s compensation for Karnataka is scheduled to end in June 2022. Bommai, too, has written two letters pressing for two demands of the state. Karnataka earns around Rs 20,000 crore per annum from petrol and diesel, while the Centre’s compensation is fixed at Rs 12,000-13,000 crore per annum.
On the inclusion of fuels under GST, Bommai, who was in Kalaburagi on Friday, said that many state governments, including Karnataka, are studying the impact of the move. “Once the state comes to a conclusion, we will make a recommendation to the Union Government,” he added.