Bangalore, September 16 (IANS): The government of Karnataka stands ready to oppose the proposal to bring gasoline and diesel within the scope of the goods and services tax (GST) at the GST council meeting that is taking place. will be held in Lucknow, Uttar Pradesh on Friday.
The decision is taken in view of the fact that, if gasoline and diesel were subject to GST, the state would face a revenue shortfall of up to Rs 700 crore.
“We need time to recover from the economic downturn after the Covid-19 lockdown for two years. Instead, we will ask the central government to provide compensation for an additional two years. The state’s situation will be presented to the Union government and the GST Council effectively, ”said Basavaraj Bommai, Chief Minister of Karnataka.
C. Shikha, Karnataka’s tax commissioner, will attend the GST council meeting on Friday. She was briefed on the need for a longer compensation period and Karnataka’s position on bringing gasoline and diesel into the GST net.
The central government sought the advice of the state government to introduce fuel into the GST net. The central government’s proposal would be to regulate fuel prices in the country. It is believed that the new step will lower fuel prices and reduce the burden on people.
The Centre’s decision to bring fuel into the GST net is expected to lower gasoline prices from Rs 104 per liter in Karnataka to Rs 59 and the price of diesel will drop from Rs 94 to Rs 50, as the State and Center will only have to share 28 percent of the taxes levied on fuel as well, experts say. It is expected to create a significant financial deficit for the state. The Center will also lose revenue.