GST Overhaul is Coming, But Don’t Expect Lower Bills for Petrol, Electricity, and Alcohol
Despite a major overhaul of India’s Goods and Services Tax (GST) regime, your hopes for cheaper petrol, electricity, and alcohol might be put on hold. The government’s plan for a “GST reset” is moving forward, but key items that affect your daily expenses are being left out—for now.
Here’s a breakdown of why:
Petrol and Diesel: A Matter of State Revenue
Bringing petroleum products under GST has been a long-standing demand. However, state governments rely heavily on the revenue from taxes on these fuels. An official from the Finance Ministry explained that it will take time to implement such a change, as the states are concerned about losing a significant chunk of their income.
Alcohol: The Need for a Constitutional Amendment
When it comes to alcohol, the issue is more complex. Officials clarify that this is outside the scope of the GST law and would require a constitutional amendment. This is a lengthy and politically challenging process, with no clear timeline for when it might happen.
Electricity: Another Challenge for the GST Council
Similar to petrol and alcohol, electricity is another major revenue source for states. The government acknowledges that bringing it under GST would pose significant challenges, and political considerations are expected to weigh on any decision the GST Council makes.
In short, while the GST overhaul aims to simplify the tax system, it seems the bigger, more politically sensitive questions about exemptions and state revenue will remain unresolved.