TNI Bureau: Biju Janata Dal (BJD) Rajya Sabha MP Dr. Sasmit Patra has written to Union Finance Minister Nirmala Sitharaman urging the Centre to bring petrol and diesel under the Goods and Services Tax (GST) framework and place the proposal for discussion in the next GST Council meeting.

In his letter dated May 17, Dr. Patra stated that bringing petroleum products under GST could provide major relief to consumers and reduce inflationary pressure across sectors. Referring to indicative calculations based on a 28 per cent GST regime, he said petrol prices in Odisha could come down by nearly ₹25 per litre, while diesel prices could reduce by around ₹14 per litre compared to the existing tax structure.

The BJD MP pointed out that Odisha currently imposes nearly 28 per cent VAT on petrol and around 24 per cent VAT on diesel, resulting in average retail prices of about ₹101-102 per litre for petrol and ₹92-94 per litre for diesel during 2025-26. Under the proposed GST structure, petrol prices could reduce to nearly ₹75.52 per litre and diesel prices to around ₹78.08 per litre, according to the illustrative estimates mentioned in the letter.

Dr. Patra stated that lower fuel prices would directly benefit farmers, transport operators, small businesses and middle-class consumers. He noted that reduced diesel costs would lower irrigation expenses in the agriculture sector and also decrease logistics and transportation costs for industries such as mining, steel and aluminium in Odisha. He further said sectors linked to Paradip Port and industrial corridors across the State could gain improved competitiveness due to lower operational expenses.

Highlighting the broader economic impact, the BJD leader said that inclusion of petroleum products under GST would help create a more uniform national taxation system, improve tax transparency and reduce cascading tax effects that currently increase fuel prices.

At the same time, Dr. Patra acknowledged that the move would have revenue implications for both Odisha and the Centre. He noted that Odisha currently earns nearly ₹9,700 crore annually from VAT on petroleum products and stressed that any transition to GST must ensure fiscal stability for States. To address this, he suggested a phased implementation model along with transitional compensation support for States and a calibrated cess mechanism to offset potential revenue losses.

The Rajya Sabha MP also referred to constitutional provisions under Article 279A(5), stating that petroleum products were always envisaged to be eventually brought under the GST framework. He cited earlier deliberations of the GST Council, including discussions held during the 45th GST Council meeting in 2021, where the issue had been raised.

Dr. Patra urged the Union Finance Minister to include the matter as a formal agenda item in the upcoming GST Council meeting and initiate structured consultations with States to evolve a practical, balanced and consensus-driven roadmap for bringing petrol and diesel under GST.