Petrol and Diesel under GST: Arun Jaitley and P Chidambaram exchange heated arguments in Rajya Sabha

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New Delhi | Published: December 20, 2017 9:29:22 AM

The Question Hour of Rajya Sabha, on Tuesday, saw a heated exchange of words between the Union Finance Minister Arun Jaitley and senior Congress leader and former Finance Minister P. Chidambaram over the question of bringing petroleum and diesel in the ambit of GST.

Arun Jaitley and P Chidambaram exchange heated arguments in Rajya Sabha

The Question Hour of Rajya Sabha, on Tuesday, saw a heated exchange of words between the Union Finance Minister Arun Jaitley and senior Congress leader and former Finance Minister P. Chidambaram over the question of bringing petroleum and diesel in the ambit of GST. TDP member Devender Goud during the Question Hour raised the issue to which Jaitley clarified that the government is in favour of bringing petroleum products under the ambit of the Goods and Services Tax (GST) but would await consensus among states before making any such move. Addressing the speaker, Jaitley said, “The Constitution amendment, which has been passed and ratified by state assemblies, actually has not kept petroleum products out. Petroleum products are a part of the GST, but a decision to levy GST on petroleum can be taken only after the GST council takes a decision… We don’t need to amend any law if petroleum products are to be brought into GST, but only after the council takes a decision is when it will be introduced.”

Chidambaram reacted sharply to Jaitley’s clarification saying, “The question really is: When will the GST council decide? When will the GST council take up this subject and what is the position of the central government, which has virtually a veto on the decision of the GST council?” Adding that he is ‘not satisfied’ with the government’s statement, he said, “If you go by crude oil prices in May 2014 and say in October 2017 — since then there has been a rise in crude oil prices — prices fell by 49 per cent, allowing for exchange rate variation, price of petrol and price of diesel should have come down by at least 20 per cent at the retail level. But at the end of October 2017, the price of petrol was the same as it was in May 2014 and the price of diesel was Re 1 more than in May 2014.”

Hitting back, Jaitley said, “He (Chidambaram) will recollect that when UPA was in power, they knew the limitations as far as petroleum was concerned. So, in the 115th Constitutional amendment, which was proposed, petroleum was kept completely out of GST. The UPA Constitutional amendment draft proposals presented before Parliament did not include petroleum products ever to be a part of GST itself because UPA well knew that it will be a deal-breaker between the Centre and the states if you bring in petroleum. And, therefore, you did not even make an effort. Now that you are in Opposition, you have far greater flexibility in reversing your position.”

Responding to the charge that petrol and diesel prices were not coming down in line with global prices, Mr. Jaitley said it has to be kept in mind that a large number of duties on these products were imposed by the States. He said that on the Centre’s advice, many States had brought down these taxes but those ruled by the UPA (Congress and its allies) had not done so. “After a great deal of consultation, we managed to persuade all the states to agree to bring in petroleum within GST itself. But the states reluctantly agreed to do so… It will be only when the states decide and agree to it that the council will have the power to then decide to bring petroleum into GST. As far as the central government is concerned, we are in favour of bringing it… but we would await consensus of the states. I do hope that at some stage, sooner than later, states agree,” he said.

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