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Petrol, diesel to remain out of GST ambit: GST Council Meet Update

The GST Council Meeting today once again failed to announce any major relief to the common man – battling high prices and inflation

Friday September 17, 2021 9:18 PM, ummid.com with inputs from Agencies

GST Council Meeting decision today

Lucknow: The consumers have to continue bear the burden of high fuel prices as petrol and diesel will remain out of the Goods and Services Tax, popularly known as GST, ambit, as per the latest update coming from the GST Council meeting held in Lucknow Friday.

There were wild speculations - ahead of the 45th GST Council Meeting in Lucknow Friday, that fuel prices might be brought under the ambit of GST. The proposal, raised by various circles, however was rejected by those present in the meeting, sources in the know-how of the meeting proceeding said.

Sources said a decision to reduces taxes on various Covid-19 drugs have been taken in today’s meeting. The meeting however failed to announce any major relief to the common man – battling high prices and inflation.


Union Finance Minister Nirmala Sitharaman chaired today's meeting held in Lucknow. It was expected ahead of today's meeting that the strong demand to bring petrol and diesel under the ambit of GST will be given due consideration.

The meeting, however, like in the past, rejected the proposal, leaving the common man disappointed by the government's failure to address the rising fuel prices - selling for over Rs.100 per litre for the first time in India's history.

"The GST Council felt it wasn't time to bring Petrol, Diesel under GST", Nirmala Sitharaman said while addressing the press after the meeting.

Another contentious issue that was taken up by the GST council was imposing GST on Swiggy and Zomato which would make food ordering costlier. Reports said this proposal has been approved by the GST council.

Compensation cess extended till March 2026

In another burdon on tax payers, the GST Council today extended compensation cess for the period upto March 2026 to what it said enable the Centre to repay the loans, including principal and interest taken, to compensate states for GST collection shortfall.

As per the GST legislation, states were to be compensated by the Centre for a period of five years till July 2022 for any shortfall in revenue due to GST implementation.

The Centre borrowed and provided states a sum of about Rs 1.10 lakh crore in FY21 and has provided cash compensation of Rs 75,000 crore this year. More borrowings can take place in FY22, as earlier anticipation of shortfall was about Rs 1.58 lakh crore.

In another decision taken today, the GST council set up a Group of Minister (GoM) to thrash out contentious crucial issue of compensation for states beyond June 2022.

Sitharaman further said that inverted duty scheme on footwear and textiles will be corrected from January 1, 2022.

The GST Council has already met twice this year when the panel of finance ministers discussed GST compensation and the borrowing formula offered by the Centre towards compensating states for GST shortfall while also announcing a series of duty relief and easing of compliance measures towards Covid relief.

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