The Kerala High Court has sought an explanation from the GST Council over the exemption of petrol and diesel from the tax.
The Kerala High Court on Monday ordered the Goods and Services Tax (GST) Council to file a statement explaining why petroleum items were not included in the GST's scope.
While hearing a public interest litigation (PIL) petition filed by an organisation, Kerala Pradesh Gandhi Darshanvedi, which claims, among other things, to work towards achieving a welfare state, a Division Bench of Chief Justice S Manikumar and Justice Shaji P Chaly directed the GST Council to file a statement in this regard within ten days. According to the PIL, which was filed by counsel Arun B Varghese, the recent rapid increase in petrol and diesel prices has wreaked havoc not only on general economic stability, but also on the lives of ordinary people, particularly those from lower-income households.
It was argued that different rates for petrol and diesel are charged in different parts of India due to varied tax rates applied by state governments under "fragmented taxing policies." According to the petitioner, this obstructs the creation of a harmonised national market as envisioned by Article 279A(6) of the Indian Constitution. It was also claimed that, while petroleum corporations may be required to set crude oil prices based on market forces, the Central and State governments' tax rates account for at least 60% of the overall price of petrol and diesel.
The petition further claimed that when elections are approaching, the federal and state governments intervene and control gas prices, despite claiming that the prices are set by petroleum marketing corporations. In particular, it was argued that the exclusion of petrol and diesel from the GST regime is a violation of Articles 14 and 21 of the Indian Constitution, because rising petrol prices cause inflation in the prices of various other commodities, which directly affects the common man, particularly those from low - income backgrounds.