Responding to a question, post discussion on the Union Budget at Chennai Citizen’s Forum, on whether the rise in petrol price will be brought under control, the Union Finance Minister said that this is a very vexatious issue, and the issue on which no answer except for reducing the price will convince anyone.
The Finance Minister said it is a matter for which both the Centre and state governments need to work together and see whether there is a way to fix the issue. Oil production countries have predicted that production is likely to come down, it will put pressure on petrol prices further, the FM added.
“If all this is the reality, it is the oil marketing companies who have to decide whether they have to cut the prices down or not because (technically), the oil prices have been freed, and the government has no control over it. It is the marketing companies that import the crude; refine it, distribute it and put the cost of logistics everything else,” she said.
“I just cannot be one Union Minister in the Union government to say, right we will bring it down by this much. Will that guarantee that space is not going to be occupied by the states because everyone now needs money, revenue. At the same time there was a sense of relief in the Budget with one additional price being in demand from – the tax payments. It is a ‘Maha Bayankar Dharma Sankatam,” she said.
On whether petrol and diesel prices can come under GST to address the issue, she said it needs to have a thorough discussion in the GST Council and consultation among the states. The provision has already been made in the GST Act. There is no need to do any amendments in the Parliament. “But once they agree on a rate, yes all over the country, there can be just one number if one state is more expensive than the other. This anomaly can be addressed. There can be just one tax that can be shared by both the Centre and the States rather than the States having their own and the Centre having its own,” said the Finance Minister.
Speaking about GST rationalisation, she said, it (rationalisation) should come.
The Finance Minister said two issues need to be considered. Should there be so many slabs and revenue neutral during the launch as the rates have been changed in so many items.
“We have ended up with an inversion problem. Raw materials have been taxed higher than the finished goods. I was astonished to see in some items, we are giving more refunds than they get taxed. How is that? How can I justify that? There is a need for the GST Council to cool headedly think – are you doing the GST itself a harm by unthinking rate changes. Rationalisation is required as the end consumer does not have too many slabs and inversion tax”, she said.