Finance Minister Nirmala Sitharaman announced on Saturday that the central government intends to include petrol and diesel under the GST framework, leaving the decision on the tax rate to the states. She explained that former Finance Minister Arun Jaitley had already included petrol and diesel in the GST law, and now the states need to convene to determine the appropriate rate.

“The GST, as envisioned by my predecessor Arun Jaitley, was meant to include petrol and diesel. It is now up to the states to decide on the rate. The intent has always been clear; we want these fuels under GST,” Sitharaman stated.

Since the introduction of GST on July 1, 2017, which replaced numerous central and state taxes, five commodities – crude oil, natural gas, petrol, diesel, and aviation turbine fuel (ATF) – were included in the GST law but were to be taxed later. Currently, the central government levies excise duty on these products, while state governments impose VAT. These taxes, especially excise duty, have been increased periodically.

Sitharaman emphasized that the Central Government’s intent during the implementation of GST was to eventually bring petrol and diesel under this tax regime. “The provision for including these fuels in GST has been made. The only remaining step is for the states to agree on a rate within the GST Council,” she added.

She further explained that once the states agree on the rate in the council, the decision will be formalized in the Act. Bringing oil products under GST would allow companies to offset the tax paid on inputs and ensure uniform taxation on fuels across the country.