Petroleum products, alcohol excluded from GST regime
By subsuming most indirect taxes levied by the central and state governments like excise, service tax, VAT and sales tax, the pan-India goods and services tax (GST) regime has proposed to facilitate a common market in the country.
As a measure of support for the states, petroleum products, alcohol for human consumption and tobacco have been kept out of the purview of GST.
Taxes on alcohol make up a major chunks of state revenues -- for instance, in Kerala it contributes 22 percent of revenue, while in Tamil Nadu it yields about Rs.21,000 crore per year.
Transport fuels like petrol and diesel are taxed at 20 per cent, while states earn 35 percent of their sales tax revenues from them.
In passing the GST Bill 2014 on Wednesday, the Lok Sabha also approved an amendment to help further states in the transition phase, by levying an additional tax of 1 percent on inter-state trade on goods.
Mukund Rajamannar
9 years ago
What are we going to get for the additional 1% tax that is being paid? Politicians dole out more freebies before elections.
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