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Fuel out of GST: Council’s decision huge relief for Kerala, other states

The GST Council decision against bringing petrol and diesel under the ambit of GST has come as a huge relief to Kerala and the other states.

Published: 18th September 2021 06:27 AM  |   Last Updated: 18th September 2021 06:27 AM   |  A+A-

Petrol, Fuel

For representational purposes (Photo | EPS)

By Express News Service

THIRUVANANTHAPURAM: The GST Council decision against bringing petrol and diesel under the ambit of GST has come as a huge relief to Kerala and the other states.  Finance Minister K N Balagopal said that the state would have lost Rs 8,000 crore annually if the fuel tax were shifted to the GST regime.

The council considered the proposal on the basis of a directive from the Kerala High Court to take a decision on bringing petroleum products under the ambit of GST. Currently, petrol, diesel, crude oil, natural gas, and aviation turbine fuel(ATF) are not covered under GST.

The state also stands to gain from the decision to put off the proposal for imposing higher tax slab on coconut oil sold in containers of less than 1,000 ml. The GST fitment panel had proposed to classify such containers as hair oil (cosmetics), which will attract the tax slab of 18 per cent. But Kerala opposed this. 

The state was for continuing the 5 per cent tax slab irrespective of the quantity. “Kerala argued that it will result in additional burden for people who buy the oil in lesser quantities for cooking purposes. The taxation for coconut oil alone is discriminatory as it is used mostly in Kerala and other south Indian states.

Based on our request, the council decided to conduct a detailed study on the taxation of coconut oil before further discussion,” Balagopal said in an FB post after the council meeting.   The state also raised compensation-related issues at the meeting.



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