34269Landlords gain from rental yield increase, tenants’ budget gets spoiled!

In India these days the common man checks prices of petrol and diesel as regularly as stock market investors check the prices of the stocks they invested in and the indices. They are no maniacs. For the second time this year, the price of petrol has crossed Rs 100 a litre and diesel is close to Rs 90 a litre, hurting everybody including those who do not own vehicles.

Diesel is a fuel on which all goods move across the country, and therefore, regular rise in diesel prices contributes a significant part to inflation by continuously pushing up transport cost. If petrol and diesel become more expensive the effect is not limited to the direct buyers of these items but is immediately transmitted to society at large.

Therefore, it makes a compelling case to bring both the products under the GST net, the tax that has been introduced with the idea of making the country a level playing field.

India has the dubious distinction of levying the highest taxes on petro products in the world. About 60% of the retail price of petrol and about 55% of that of diesel comprise of taxes by the Centre and states. Ironically, no government is short on lip service to the need for bringing them under the GST umbrella, but no government – even the opposition ones – takes the step of mentioning it in the GST council.

It is argued that states have to forego an annual tax revenue of about Rs 2 lakh crore if petrol and diesel come under GST. But it is incumbent on the government to abandon the low-hanging fruit and go for growth to shore up its revenues than keep on milking the convenient cows for filling its coffers. It might be convenient but it’s unfair.