A Division Bench of the Kerala High Court on Wednesday expressed its dissatisfaction over the reasons given by the GST council for not bringing petrol and diesel under the purview of the GST.

The Bench led by Chief Justice S. Manikumar while dealing with a petition seeking to include the fuels in the GST observed that “the Bench is not satisfied with the reasons. There should be some discussion and genuine reasons as to why petroleum products cannot be brought under the GST regime”.

When the petition came up for hearing, Counsel for the Central Board of Direct Taxes and Customs furnished a letter dated November 29, 2021 from the Director of Goods and Services Tax Council, New Delhi stating that the petroleum products could not be brought under the GST regime.

Three reasons cited

The court observed that even though the matter was taken in the 45th GST Council meeting, three issues seemed to have been considered by the Council with respect to bringing the petroleum products under the GST regime. The reasons for not including the fuel in the GST were high revenue implications and that it would be difficult to bring petroleum products under the GST regime during pandemic times and the need for more deliberations..

The court said that the “pandemic period cannot be cited as a reason. It is well known that even during pandemic period, several decisions were taken involving revenue, after deliberations”.

The court further directed the Central Board of Direct Taxes and Customs to file a detailed statement after considering the court’s observations.

Related Topics