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- The Central Government has ruled out including petroleum products within the ambit of GST immediately by turning down repeated demands from the aviation sector and oil companies.
- The petroleum ministry has also asked for the inclusion as the benefit of GST is not helping oil companies as they cannot claim an input tax credit.The credit can only be claimed if the entire chain from inputs to the final product pays GST.
- However,the Central government is of the view that the inclusion of petroleum products will not be supported by the states in GST Council as states wants to retain flexibility in taxing a few items.
- Stamp duty on real estate, excise on alcohol and petroleum products are among the handful of items on which states still have control after the introduction of GST.
- Besides,the Government is also not keen on moving to GST for products such as aviation turbine fuel(ATF) or jet fuel.The government argues that the taxes on ATF which airlines say is among the highest in the world is already passed on to consumers.
- Input tax credit is the tax that a business pays on a purchase and that it can use to reduce its tax liability when it makes a sale.In other words, businesses can reduce their tax liability by claiming credit to the extent of GST paid on purchases.
- GST (Goods and Services Tax) is an indirect tax that has replaced many Central and State taxes like excise duty, VAT and service tax. It is a single comprehensive tax levied on all goods and services produced in India as well as those imported from other countries.
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