New Delhi, Sep 21 (DHNS): Even as Petroleum Minister Dharmendra Pradhan is pushing hard to bring petrol and diesel under the GST ambit, the Centre has no plans to do so in the near future.

Highly placed sources in the finance ministry told DH that the states’ revenue position is not so good as to deprive them from collecting VAT and other local taxes on auto fuels.

At present, the Centre levies an excise duty of Rs 21.48 and states levy a VAT of around Rs 15 on petrol. Besides, the states also get a share from the excise kitty of the Centre. Same is the case with diesel. The states levy a VAT of Rs 8.69.

In case the fuels are brought under the GST regime, the maximum tax that can be levied is 28%. This will replace the excise and VAT, implying that the cost for the consumer will come down drastically, but the Centre and states will lose.

In the current regime, the taxes on petrol and diesel are levied at close to 55%. However, of late Pradhan has been saying that his ministry has requested the finance ministry to bring petroleum products under the ambit of GST in a bid to rein in VAT charged by various states. The finance ministry sources said, “this is not possible in the near future. The states cannot afford it”.

However, analysts said that neither the Centre nor states can afford to bring petroleum under the GST as it remains a source of significant revenues to both.

Over three years, the government has mopped up Rs 12.8 lakh crore as tax revenue from petroleum product sales, mainly that of from petrol and diesel.

According to official data, from 2015, the growth in the government’s revenue from petroleum products has been 25%. In 2016-17, the government’s revenue from the petroleum sector was Rs 5.24 lakh crore, accounting for 3.5% of GDP. Nearly half of this was central excise and another half the state taxes.