Will Petrol & Diesel Come Under GST? Nirmala Sitharaman Responds

Mumbai: Finance Minister Nirmala Sitharaman , during a post-budget interaction with industry stakeholders in Mumbai, talked about key tax benefits for the middle class and social security measures for gig workers. She reaffirmed the government’s commitment to employment generation, support for MSMEs, and increased investments in agriculture to drive economic growth.

Addressing queries on the inclusion of petrol and diesel under the Goods and Services Tax (GST), Sitharaman stated, "We have taken a decision on imposing GST on petrol and diesel, but states need to decide."

Union Minister of State for Finance Pankaj Choudhary further clarified that the GST Council will determine whether petrol and diesel should be brought under the tax regime. He asserted that the GST Council, a constitutional body comprising both the Centre and state governments, makes decisions through collective consensus.

"Any decision will be based on the consensus of all members, and all decisions are taken unanimously," Choudhary told reporters.

For the unversed, Petrol and diesel are not currently taxed under GST. 

Instead, these fuels—along with natural gas and aviation turbine fuel (ATF)—are subject to Value-Added Tax (VAT), central excise duty, and central sales tax. 

As a result, petrol and diesel prices vary across states.