New Delhi: Finance Minister Arun Jaitley today wrote to Chief Ministers of states for reduction of Value Added Tax burden on petroleum products.
Mr Jaitley urged the Chief Ministers to reduce the burden of VAT on petroleum products, used as inputs in making of goods after the introduction of the Goods and Services Tax.
The Finance Minister highlighted the concern being raised by the manufacturing sector in the country regarding the rise in input costs of petroleum products happening on account of transition to Goods and Services Tax regime.
In the pre-GST regime, because the petroleum products as well as the final goods produced both attracted VAT, input tax credit of petroleum products being used as inputs by manufacturers was allowed to varying extent by different states.
However, in the post-GST scenario, the manufactured goods attracted GST, while the inputs of petroleum products used in the manufacturing attracted VAT and, therefore, it would lead to cascading effect of taxes, the Finance Ministry said in a statement. (UNI)
Mr Jaitley urged the Chief Ministers to reduce the burden of VAT on petroleum products, used as inputs in making of goods after the introduction of the Goods and Services Tax.
The Finance Minister highlighted the concern being raised by the manufacturing sector in the country regarding the rise in input costs of petroleum products happening on account of transition to Goods and Services Tax regime.
In the pre-GST regime, because the petroleum products as well as the final goods produced both attracted VAT, input tax credit of petroleum products being used as inputs by manufacturers was allowed to varying extent by different states.
However, in the post-GST scenario, the manufactured goods attracted GST, while the inputs of petroleum products used in the manufacturing attracted VAT and, therefore, it would lead to cascading effect of taxes, the Finance Ministry said in a statement. (UNI)
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