Introduction:
Petroleum products are outside the coverage of GST.
Consequently, these products suffer non-creditable GST and other
costs/taxes on their procurement which leads to a cascading effect.
Exacerbating the issue is the fact that the burden of such
non-creditable taxes is solely borne by the oil and gas industry.
Additionally, petroleum companies, which are already burdened with
domestic taxes are mandated to sell oil and gas at internationally
benchmarked prices. For the last 5 years, it has been the
persistent request of the oil and gas industry to be included
within the fold of GST, however, despite assurances and a clear
legislative1 mandate, the request is yet to be acceded
to.
