Important changes of Budget 2017, effective from 01st April 2017     Key Features of BUDGET 2017     Budget 2017 - Highlights     After liberal concessions by Centre, GST council inks breakthrough, new tax regime roll-out on July 1     I-T Dept to keep record of deposits over Rs 2 lakh     IT Department changes PAN rules for automobile sales above Rs 2 lakh     GST Council meet: 14% revenue growth assumed for states     Submit monthly data of appeals disposed of: CBDT to officers     GST: The ride just got better for logistics     Adoption of GST poised to boost India's medium-term growth: IMF     GST Network operating expenses to be funded by user fee     GST rate of 18% to have short-lived impact on inflation, says RBI     GST Council: Tax exemption threshold fixed at Rs 20 lakh     GST Council consensus emerging on April 1, 2017 rollout, Rs 25 lakh threshold     Recommended 7-year tax holiday for start-ups: Sitharaman     Centre may have to re-notify GST Constitutional Amendment Act; here’s why     Rules may be eased for banks and NBFCs under GST     GST bill now a law, President Pranab Mukherjee gives assent to the constitutional amendment bill     GST will unleash significant economic activity: Barack Obama     Due Dates for the Month of July 2017     RuPay debit cards to gain from small finance banks     Barring five all petroleum items under GST regime     Sebi relaxes restrictions on more than 200 entities      Important Amendments effective from 01.06.2016    

    Quick Query






    User Log in

 Barring five all petroleum items under GST regime

Clarity on the applicability of goods and service tax (GST) on petroleum products may be absent but analysts say a dual tax regime for the oil and gas industry will make compliance difficult.

Products like kerosene, naphtha and LPG will be under the ambit of GST, while five items in the basket — crude oil, natural gas, aviation fuel, diesel and petrol — have been excluded during the initial years.

Abhishek Jain, tax partner, EY India, said the oil and gas industry would largely be negatively impacted by the introduction of GST. “Because of the peculiarity, this industry would be pained to comply with both the current tax regime as well as the GST regime,” he said.

While compliance is one reason, taking tax credit would be another issue. Besides, there would be non-creditable tax costs. Jain cited the example of a refinery producing diesel and petrol that would pay GST on the procurement of plant, machinery and services; GST would not be creditable against the out-excise duty and VAT levied on petrol and diesel. 

 

“The said tax costs would have an inflationary impact on the overall economy,” he said.

Under the proposed GST regime and the current VAT structure, tax on inputs are deducted from the tax payable on the final product. Besides plant and machinery, crude oil and natural gas, which are processed to get various petroleum products, do not attract GST. For instance, LPG is produced both from natural gas and crude oil. While LPG would be part of GST, crude oil and natural gas would not be.

The constitutional amendment Bill cleared by the RajyaSabha is an enabling legislation. It is expected that clarity on what happens to the rates on petroleum products covered under the GST ambit will come only after the central GST Bill is passed by the Union government and after the states pass their respective GST Bills. The Constitutional Amendment Bill passed by the Upper House on Wednesday said petroleum” would be under the purview of GST. It is not clear which products are covered under the generic terms.

News
Taxation Services
  • We offer comprehensive manual or computerized bookkeeping system

Audit Assurance Services
  • We offer comprehensive manual or computerized bookkeeping system

Company Formation Services
  • We offer comprehensive manual or computerized bookkeeping system

Accounting Outsourcing
  • We offer comprehensive manual or computerized bookkeeping system