Aviation turbine fuel (ATF) is unlikely to be brought under the Goods and Services Tax (GST) regime in the near term, as states seek to retain their ability to tax fuel products, a government source told CNBC-TV18.
The source said states’ “right to tax” must be acknowledged, with fuel products remaining one of the few levers available to them to raise revenue.
GST on fuel products may be considered once the tax regime becomes more robust and less vulnerable to the impact of geopolitical events, the source added.
The comments come amid discussions on GST rates and the scope for further changes to the indirect tax regime.
Proposals currently coming in are mainly seeking GST concessions, the source said, adding that there is not much left to discuss on rates and limited scope for even interpretative issues.
The government is also looking to expand the GST tax base by increasing the number of registrations, the source said.
New GST officers’ panel to subsume fitment, law committees
The government is also proposing a new GST officers’ panel that will function as a single expert body to the GST Council, subsuming the existing fitment and law committees, a government source said.
The Fitment Committee examines issues such as GST rates, exemptions and classification, while the Law Committee deals with GST legislation, rules and interpretative issues. Their recommendations are placed before the GST Council for consideration.
Maharashtra, Uttar Pradesh, Tamil Nadu, Karnataka and Gujarat will have fixed representation on the officers’ panel.
Four other states, including Odisha, West Bengal and Rajasthan, will have representation on a rotational basis for a two-year term, the source said.
State representation on the panel will be determined by their GST footprint, including revenue contribution and the number of taxpayers, the source added.
Petroleum products remain outside the GST framework for now, allowing states to continue levying taxes under the existing system. Bringing these products under GST would require a change in their tax treatment, with implications for states’ revenue arrangements.
