The states had some objection in respect of previous amendment bill as the states did not want Petroleum, Petroleum Products and Alcohol to be brought within the ambit of GST. The Centre has accepted the demand on Alcohol by keeping it outside the ambit of GST, however, the issue pertaining to petroleum and petroleum products have been resolved in a more intellectual way.

In Article 366 of the Constitution, after clause (12), the following clause has been proposed to be inserted:

‘(12A) “goods and services tax” means any tax on supply of goods, or services or both except taxes on the supply of the alcoholic liquor for human consumption;

From the above, it can be seen that Alcoholic liquor has been excluded from the ambit of GST. The Petroleum, Petroleum Products have not been excluded from the ambit of GST, however, by virtue of clause (5) of the proposed Article 279A, it has been decided that the levy on these items would be decided by the Goods and Services Tax Council to be formed and consist the members as per Article 279A(2). The relevant text is extracted below for your ease:

“After article 279 of the Constitution, the following article shall be inserted, namely:—

‘‘279A. (1) The President shall, within sixty days from the date of commencement of the Constitution (One Hundred and Twenty-second Amendment) Act, 2014, by order, constitute a Council to be called the Goods and Services Tax Council.

(2) The Goods and Services Tax Council shall consist of the following members, namely:—

(a) the Union Finance Minister……………………               Chairperson;

(b) the Union Minister of State in charge of Revenue or Finance……………..                                                          Member;

(c) the Minister in charge of Finance or Taxation or any other Minister nominated by each State Government………………..          Members.

…

(5) The Goods and Services Tax Council shall recommend the date on which the goods and services tax be levied on petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel.

The Explanation to the proposed Article 246A reiterates the said position (extracted below):

Explanation.—The provisions of this article, shall, in respect of goods and services tax referred to in clause (5), of article 279A, take effect from the date recommended by the Goods and Services Tax Council.’’.

On a perusal of the reading of the provisions of the proposed articles as extracted above, it can be evident that the present taxes levied by the States and the Centre on petroleum and petroleum products, i.e., Sales Tax/VAT, CST and Excise duty only, will continue to be levied in the interim period.

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