The Kerala high court on Monday asked the Goods and Services Tax (GST) Council why petroleum products can’t come under the GST and directed it to file a reply in ten days.
Hearing public interest litigation (PIL), a division bench of Chief Justice S Manikumar and Justice Shaji P Chaly directed the GST Council to explain reasons for not including petrol and diesel within the ambit of GST.
The PIL was filed by Kerala Pradesh Gandhi Darshanvadi, a voluntary organization. Its counsel Arun B Varghese contended that the price of petrol and diesel vary in different states according to the tax levied by them and sought a uniform tax regime for petroleum products. The petition also cited that though the Union and state governments plead helplessness in this citing, petroleum marketing companies enthusiastically participated in the reduction of fuel price before elections.
“Now different rates are being charged in different states and same is due to a different rate of tax levied by the state governments under their fragmented taxing policies. This impedes harmonised national market as contemplated under Article 279(A) 6 of the constitution,” the PIL said. It also said the state and central taxes account for at least 60 per cent of the price of one-litre fuel.
If petrol and diesel are brought under the GST, there will be a harmonious market throughout the nation and the maximum tax rate will be 28%, it said, adding that even people who are not direct consumers of fuel are affected by the unprecedented price hike.
“A welfare state must be the one where everyone is in a position to bear expenses of basic amenities. The unprecedented hike in fuel prices push the public to immense hardships by which their right to life guaranteed under Article 21 is violated,” the petition said. Respondents in the PIL are the Union of India, Kerala government, petroleum secretary, Goods and Service Tax Council and three major oil companies.
The Centre and GST Council can’t argue that if the fuel was included in the GST it would have serious implications on revenue collection. A constitutional duty was cast upon the GST Council to make a serious recommendation to include both (petrol and diesel) under the GST, the PIL said. “To declare the non-inclusion of petrol and diesel under the GST regime are violative of the Article 14 and 21 of the constitution.”
The PIL was first filed in July but it was withdrawn later after the court pointed out some glitches and they were corrected in the new one which was readily admitted by the court, said the counsel. Earlier the counsel for both union and state governments opposed the PIL, saying the fuel price regime was part of a policy decision and the judiciary can’t intervene.
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