From September 22, many essential household items in India will see relief due to a reduction in GST rates. Prices of items such as air conditioners, refrigerators, washing machines, soap, and shampoo are expected to decrease, benefiting the common man. However, the question arises why petrol and diesel, whose prices have been soaring, are not included under GST. Recently, CBIC Chairman Sanjay Agarwal clarified this, stating that it is not feasible at present to bring petrol and diesel under GST. The central government currently levies excise duty on these fuels, while value-added tax (VAT) is a significant source of revenue for states.

Taxes on petrol and diesel form a major part of state revenues, accounting for around 25-30 percent of total income for many states. Bringing these fuels under GST would significantly affect state finances, which is why the government is not taking any immediate steps in this direction. Finance Minister Nirmala Sitharaman had also highlighted that from the inception of GST in 2017, petrol, diesel, and liquor were deliberately kept out of GST to protect revenue streams for both the central and state governments.

Despite the GST relief for household items starting September 22, petrol and diesel will remain outside its ambit. CBIC Chairman emphasized that both the central and state governments currently aim to avoid revenue loss from these products, making their inclusion in GST unlikely in the near future.