It’s been a few days left for the Union Budget 2020 presentation to take place in Parliament and the trade body Federation of Indian Chambers of Commerce & Industry (FICCI) has put forth another proposal.
FICCI is sighing for excise duty benefits for the producers in the petroleum sector on their output against GST payments they made on inputs.
In the pre-budget proposals, the industry body expressed that the producers of petroleum and natural gas should be permitted to negate the ITC for Goods and Services Tax (GST) that these producers pay on inputs against the excise duty impossible on their output.
Under the current scenario, petroleum crude, petrol, natural gas, high-speed diesel and aviation turbine fuel are out of GST ambit. When the GST was implemented in July 2017 with an objective of “one-nation-one-tax”, these five petrol-products – petrol, crude oil, diesel, natural gas and aviation turbine fuel (ATF) were kept out of GST purview.
So, accordingly, the input tax credit of GST liability executed on procurement is not permitted against the output tax liability to the supplier of the respective products and so it becomes an additional cost for the oil and gas companies.
According to the industry body, till the time GST gets implemented on petrol-products, appropriate amendments in the CENVAT (Central Value Added Tax) rules will bring down the production costs for oil and gas corporations.
At present, the government is of the view that petrol and diesel should be brought under the purview of GST. The first Union Budget for the whole year under the governance of Prime Minister Narendra Modi will be presented on 1 February 2020 by the Finance Minister Nirmala Sitharaman in Parliament.
FICCI, in its pre-budget memorandum 2020-21, also urged for clear interpretation and changes in the Taxation Laws (Amendment) Bill, 2019, for the best utilisation of cuts in corporate tax rates by the current as well as upcoming domestic companies and the clearance of higher surcharge by non-corporates on some selected capital market transactions issued via the Bill.