TNI Bureau: Dr. Sasmit Patra met Union Finance Minister Nirmala Sitharaman and submitted a detailed representation urging the Centre to initiate structured national deliberations on bringing petrol and diesel under the Goods and Services Tax (GST) framework.

In his memorandum, Dr. Patra stated that Article 279A(5) of the Constitution already provides for the eventual inclusion of petroleum products under GST through recommendations of the GST Council. He noted that although the matter had been discussed earlier by the GST Council following directions of the Kerala High Court, the present economic situation calls for a fresh and consultative review of the issue.

The BJD Rajya Sabha MP highlighted that fuel prices have a direct impact on inflation, transportation and logistics costs, agricultural inputs, MSME operational expenses and household consumption across the country. He also pointed out that differences in VAT structures among States continue to weaken the objective of tax harmonisation and market integration envisioned under the GST regime.

Referring to Odisha’s economic profile as a mining, industrial and logistics-intensive State, Dr. Patra said that a calibrated inclusion of petrol and diesel under GST could help reduce freight and supply-chain costs, improve industrial competitiveness and provide economic relief to citizens, farmers, transport operators and MSMEs.

At the same time, he acknowledged concerns of States regarding possible revenue loss from petroleum taxation. He therefore proposed a balanced and phased approach instead of immediate unconditional inclusion under GST. His suggestions included a calibrated GST slab structure, transitional compensation support for States, a limited revenue-protection cess mechanism and a formula-based fiscal stabilisation framework during the transition period.

Dr. Patra also urged the Union Finance Minister to facilitate consultations with all States and consider setting up a technical and fiscal working group to examine implementation models and build national consensus on phased integration of petroleum products into the GST framework.