Petrol, alcohol not to come under GST in near future: Sithraman on tax reforms

Finance Minister Nirmala Sitharaman on Friday ruled out the inclusion of petrol and diesel under the Goods and Services Tax (GST) framework in the near future.

In an interview with Network18 Group Editor-in-Chief Rahul Joshi, Sitharaman said the current discussions within the GST Council do not cover petroleum products or alcohol. “Not in the immediate future,” she responded when asked about a possible timeline.

When GST was rolled out in July 2017, fuel and liquor were deliberately excluded as both remain crucial revenue streams for the Centre and the states through excise duties and value-added tax (VAT).

Bringing them under the GST would curtail states’ fiscal space, a concern that has long stalled consensus. As a result, fuel and alcohol continue to attract separate levies, often keeping retail prices elevated even as GST simplified indirect taxation for most other sectors.

Earlier this week, the GST Council, chaired by Sitharaman, approved a major round of rate cuts. The 56th meeting concluded with reductions on a range of products — from essentials such as shampoo and hair oil to automobiles and televisions. The Council also endorsed a simplified three-slab structure of 5%, 18% and 40%.