If this announcement is made in the budget then petrol and diesel prices will fall in one go, know how?

Budget 2024: The first full budget 2024-25 of the third term of the Modi government is going to be presented on Tuesday, July 23. All eyes are on Finance Minister Nirmala Sitharaman, who can make big announcements. Experts and industry leaders are hoping that this time policies have been made according to all sections in the budget. In which there may be an announcement to bring petroleum products under the ambit of GST.

Energy industry giants are hopeful that this time the Modi government will announce inclusion of petroleum products under GST.

Petrol and diesel will come under the purview of GST

On July 1, the Modi government announced the implementation of GST. The objective behind implementing GST was to implement the one nation one tax policy. In which improvements are made from time to time. However, despite the demand for the last seven years, petroleum products like petrol-diesel, natural gas, aviation turbine fuel have not been included in GST.

VAT is applicable on petrol and diesel

Petroleum products are still subject to taxes like excise duty and VAT. If different taxes on petroleum products are removed and only GST is implemented, then it can reduce the prices. Apart from this, traders can also claim input tax credit (ITC). This will also reduce their overall cost.

Petrol and diesel prices are determined by four main factors:

original price: The basic price of any petroleum product includes transportation costs.

Dealer's commission: Dealer's commission is added to the original price.

Excise duty: This also includes excise duty levied by the Central Government.

Value Added Tax (VAT): Later, the state government itself imposes VAT, which is different in every state.

All these factors together create a price, which is the final price of petrol and diesel.

Will petrol and diesel become cheaper due to GST?

If excise duty and VAT are removed and a single tax i.e. GST is implemented in its place, then the prices of petrol and diesel can become cheaper. Due to which the prices of petrol and diesel will become the same across the country. And customers will get relief. If Finance Minister Nirmala Sitharaman decides to bring petroleum products under the ambit of GST, then industries as well as consumers can get relief. By imposing a single tax GST in place of excise duty and VAT, the prices of petrol and diesel will come down. Not only the industry but also the common man is troubled by the continuous increase in the prices of petrol and diesel.