Classifying Petroleum Products as goods of Special Importance
Friends,
Recently we have submitted a view in the Inflation discussion in Prime Ministers circle to consider Petroleum Products as goods of Special Importance thereby classifying Petrol/Diesel for lower CST/VAT. Here is the excerpt. Your views are most welcome.
Central Sales Tax 1957 and the Power of the Central Government to declare an item as Declared Goods, to be of Special Importance in Inter-State Trade and Commerce .
It would be seen that Section 14 of the Central Sales Tax Act 1957 prescribes the goods of Special Importance in Inteer-State Trade or Commerce, which, inter alia, includes various items, such as Cereals, Coal, Coke, Cotton Fabrics, Cotton Yarn, Crude Oil, Aviation Turbine Fuel, Skins, Iron & Steel etc. etc.
It may be noted that while the Crude Oil, had been included as item of importance in the Inter-State Trade, however, Petroleum Products, such as Petrol, Diesel, etc. have not been declared as items of importance in Inter-State Trade. It is felt that there is absolutely no reason for these items to be excluded from this list. Once such items are included as such, the State Government would not be able to charge local sales tax, more than the rate prescribed of tax under the Central Sales Tax Act, i.e. 4% or 3%, as may be applicable from time to time. In other words, the right of State Government to tax Petroleum Products at higher than the Central Sales Tax Act rate would be restricted. It is seen that some of the Sates have Sales Tax rates in respect of Petroleum Products even at the rate of 20%, while other States like, Goa etc. has only 5% as the maximum V.A.T. rate. Once an amendment is done in the Central Sales Tax Act, and these items are also included in the Declared Goods Category, Sales Tax rate would come down from 20% to 4 or 5%, as the case may be. However, the State Government would have to adjust their budget accordingly, and, if necessary, the Central Government can subsidize for a year or two, as may be convenient and viable. It is felt that this step in one go can reduce the petroleum rates by minimum 12.5% to 15%.
Regards,
KG Somani more
Recently we have submitted a view in the Inflation discussion in Prime Ministers circle to consider Petroleum Products as goods of Special Importance thereby classifying Petrol/Diesel for lower CST/VAT. Here is the excerpt. Your views are most welcome.
Central Sales Tax 1957 and the Power of the Central Government to declare an item as Declared Goods, to be of Special Importance in Inter-State Trade and Commerce .
It would be seen that Section 14 of the Central Sales Tax Act 1957 prescribes the goods of Special Importance in Inteer-State Trade or Commerce, which, inter alia, includes various items, such as Cereals, Coal, Coke, Cotton Fabrics, Cotton Yarn, Crude Oil, Aviation Turbine Fuel, Skins, Iron & Steel etc. etc.
It may be noted that while the Crude Oil, had been included as item of importance in the Inter-State Trade, however, Petroleum Products, such as Petrol, Diesel, etc. have not been declared as items of importance in Inter-State Trade. It is felt that there is absolutely no reason for these items to be excluded from this list. Once such items are included as such, the State Government would not be able to charge local sales tax, more than the rate prescribed of tax under the Central Sales Tax Act, i.e. 4% or 3%, as may be applicable from time to time. In other words, the right of State Government to tax Petroleum Products at higher than the Central Sales Tax Act rate would be restricted. It is seen that some of the Sates have Sales Tax rates in respect of Petroleum Products even at the rate of 20%, while other States like, Goa etc. has only 5% as the maximum V.A.T. rate. Once an amendment is done in the Central Sales Tax Act, and these items are also included in the Declared Goods Category, Sales Tax rate would come down from 20% to 4 or 5%, as the case may be. However, the State Government would have to adjust their budget accordingly, and, if necessary, the Central Government can subsidize for a year or two, as may be convenient and viable. It is felt that this step in one go can reduce the petroleum rates by minimum 12.5% to 15%.
Regards,
KG Somani more
Viewed by 90
Yes, there is no reason that petroleum products like Petrol,Diesel etc. be excluded from the list of goods of special importance and charged higher rate of VAT- RAM GHAMBIR more
Jun 27
yes. it is right. not only sales tax but other taxes also make them costlier. Govt charges tax on one hand and provide subsidy on another-hand. why not to reduce the exsice duty also more
Jun 27
