Industry organisations want petroleum products to come under the ambit of the Goods and Services Tax (GST) in Budget 2023, which Finance Minister Nirmala Sitharaman will present in Parliament on February 1, to lower costs.

The Confederation of Indian Industry (CII) said the government should consider bringing petroleum products as well as electricity tariffs and real estate under GST at some stage over the medium term.

To be sure, any decision on GST is taken by the GST Council, a joint forum of the Centre and the states. But a recommendation in the Budget by Finance Minister Nirmala Sitharaman, who heads the Council, can be a big positive signal.

“Until the time petroleum products are brought within GST net, suitable amendment in the excise laws be made to allow credit of GST paid on inputs/input services and capital goods against payment of excise duty to the manufacturers of petroleum products,” the Federation of Indian Chambers of Commerce & Industry (FICCI) said in a pre-budget memorandum.

The energy sector has been turbulent this year because of geopolitical tensions that triggered Russia’s invasion of Ukraine in February, disrupting supply chains, sparked interest rate increases that tightened credit markets and recession fears in the US and Europe.

The Russia-Ukraine war upended the global energy market, forcing even large economies to rethink their energy sources, targets and equations.

Actions against the climate change crisis—which primarily include reducing the reliance on fossil fuels—have also gained momentum as net-zero targets of many nations approach the end of this decade.

With less than two months left for the Union Budget 2023-24, industry organisations have put forward their expectations from the upcoming budget.

Source: MoneyControl
https://www.moneycontrol.com/news/business/energy-industry-asks-for-gst-on-petrol-tax-exemptions-in-renewables-from-budget-2023-9708481.html