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Petroleum products should be brought under the Goods and Services Tax (GST) regime to remove existing anomalies and to let businesses claim input tax credit, industry body PHDCCI said on Thursday. 

“It is suggested to bring the aviation turbine fuel and piped natural gas under GST to enable the companies avail the benefit of input tax credit," the industry body said quoting its president Pradeep Multani. 

IndiGo chief executive officer Ronojoy Dutta had on Wednesday said that the surge in jet fuel price since January was impacting business given that aviation turbine fuel makes up 45% of the operational costs. 

“We have been in talks with the government to bring ATF under GST as it brings the benefit of input tax credit. We believe that such measures are needed now more than ever to offset this increase in cost and make flying viable for airlines and affordable for consumers," Dutta said in his statement.   

According to Multani, petroleum products should be brought under the ambit of GST to remove the cascading impact of taxes, an anomaly of tax getting levied on the tax component embedded in the price of an item due to inefficiency in the tax structure.  

GST rates should be further rationalised to create tremendous demand in the economy, subside the inflationary pressures and enhance the sentiments of producers, the industry body said quoting its indirect tax committee chair Bimal Jain.  

Though GST has stabilized to a large extent over the years, the business entities are still grappling with some issues such as blockage of GST credit on certain inputs and input services and complicated process of availing credit, Jain said.  

“Going ahead, the government’s efforts towards further liberalization of the GST norms, ease in procedures, shift of goods into lower tax slabs, among others will result in further promotion of ease of doing businesses, boost in manufacturing, increase in price-cost margins of manufacturers and generation of employment opportunities in the economy," the statement said quoting Jain.

 

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