Make GST a National tax: The petroleum products inclusion will make the GST truly a national tax as currently 40% of the trade is out of GST (due to the exclusion of petroleum products).
Price parity: Implementation of GST on petrol and diesel prices would bring about pricing parity across states.
Challenges
Loss of flexibility to have differential rates: Inclusion of petroleum products in GST will affect the state’s ability to have differential rates, as GST would mean a single uniform rate across the country. For instance, Karnataka has 30 per cent sales tax on petrol and 19 per cent on diesel.
