New Delhi, Oct. 6 -- An expert panel constituted by India's downstream petroleum regulator recommended bringing petrol, diesel and aviation turbine fuel under the ambit of the Goods and Services Tax regime to facilitate inter-state movement of transport fuels through pipelines instead of roads to reduce logistics cost and carbon emission. And till this is done, " CST [central sales tax] may be abolished / brought to 'nil' as originally proposed in the budget of 2007 (which proposed to reduce it from 4% to nil in four years)," the seven-member committee, constituted by the Petroleum and Natural Gas Regulatory Board (PNGRB), said. While the Narendra Modi government on July 1, 2017 rolled out the GST regime across the country, petrol, diesel and ATF were kept outside it at the insistence of states. These attract value-added tax (VAT) that differ from state to state. For example VAT on petrol and diesel in Andaman is just 1% but 35.20% and 27% in Telangana. The committee was referring to the Union Budget speech on February 28, 2007, when the then finance minister P Chidambaram said: "VAT [value added tax] has proved to be an unqualified success. The next logical step is to phase out Central Sales Tax (CST). I am glad to report that the Central Government has reached an agreement with State Governments to phase out CST." Currently, inter-state sale of non-GST items such as petrol, diesel and ATF attract 2% CST. According to the report, submitted in July this year, the applicability of CST at 2% translates to approximately Rs.1,400 per kilolitre. "This tax incidence distorts inter-state movement economics and constrains the ability of surplus product to be efficiently absorbed outside the originating state," the report said. According to Union government officials, petrol, diesel and ATF could not be brought into the ambit of GST because of opposition by states. The empowered GST Council -- which is headed by the Union finance minister and represented by finance ministers of states and Union Territories - adopts a consensus approach to take almost all its decisions. The 57th GST Council meeting, in New Delhi on Wednesday, is unlikely to take any decision involving tax rates, officials said requesting anonymity. The meeting is expected to be focused on process reforms, one of them said. Replying to a specific question on bringing ATF under GST in the Lok Sabha, minister of state for civil aviation Murlidhar Mohol said on August 6: "An agenda item on bringing Aviation Turbine Fuel under Goods and Services Tax (GST) was tabled in the 55th GST Council Meeting held on 21st December, 2024. Several states expressed their views against the proposal. Therefore, the status quo i.e. keeping ATF out of GST regime has been maintained."...