Kerala High Court seeks explanation from GST Council on exclusion of petrol, diesel from GST

The Kerala High Court on Monday directed the Goods and Services Tax (GST) Council to file a statement explaining the reasons for its decision to not include petroleum products within the ambit of GST [Kerala Pradesh Gandhi Darshanvedi Vs. Union of India]..A Division Bench of Chief Justice S Manikumar and Justice Shaji P Chaly directed the GST Council to file a statement in this regard within ten days while hearing a public interest litigation (PIL) petition filed by an organisation, Kerala Pradesh Gandhi Darshanvedi which claims, inter alia, to work towards achieving a welfare state..The PIL, filed through advocate Arun B Varghese, stated that the recent sharp spike in petrol and diesel prices has wreaked havoc, not only on general economic stability, but also on the lives of the common man, especially those from lower income households. .It was submitted that different rates are charged for petrol and diesel in various states in India due to the different rates of tax levied by State governments under "fragmented taxing policies". This, according to the petitioner, hinders the achievement of a harmonised national market as envisaged under Article 279A(6) of the Constitution of India..It was further contended that while petroleum companies may have to fix crude oil price based on market forces, the rates of taxes levied by the Central and State governments account for at least 60% of the total price of petrol and diesel. However, if petrol and diesel are brought under the GST regime there will be harmonious market throughout the nation and the maximum taxable rate is 28 percent, the plea said. .The petitioner had previously approached the Court after a representation submitted by it to the GST council seeking to bring petroleum products under the GST regime had received no response. The Court had taken note of an earlier decision of the Court that held that GST council cannot be mandated to make any decision and, therefore, chose to only direct the GST Council to forward the representation to the Union of India to take an appropriate decision. .Should petroleum products be brought under GST? Kerala High Court asks Union government, GST council to decide.However, once the representation submitted by the petitioner was considered by the GST council at its 45th meeting, it decided that it is not appropriate to include petrol and diesel within the ambit of GST at this stage. This has now been vehemently opposed by the petitioner."There is no application of mind in taking such a decision .There is no justification as to why the present stage is not ripe enough to take a decision when the rate of petrol and diesel is rising on a daily basis," the plea said..The petition also alleged that Central and State governments intervene and control petrol prices when elections are imminent even though they claim that it is petroleum marketing companies that decide the prices..Pertinently, it was submitted that the non-inclusion of petrol and diesel under the GST regime are violative of Articles 14 and 21 of the Constitution of India as the rise in petrol prices has a ripple effect that creates inflation of prices of various other commodities which directly affects the common man, but more so those from economically weaker sections of society. "The unprecedented hike in price of petrol and diesel pushes the public into immense hardship by which their right to life guaranteed under Article 21 of the Constitution is violated," the petition said..The petitioner therefore, approached the Court seeking an explanation for the decision of the GST Council and directions to include petrol and diesel within the ambit of the GST regime.The matter will be taken up next on November 19.