Implications of GST implementation on supply chain of HSD (diesel) and MS (petrol)

Abstract

Though GST has been implemented in almost all the commodities, MS, HSD, ATF, NG and Crude are not within the ambit of GST at present. The Government may introduce GST in these products in future after stabilization of GST in other commodities. Presently, MS & HSD are subjected to excise duty, customs duty (for Imports), Central Sales Tax (CST), Value added Tax (VAT) and other taxes and levies. The taxes are different in each of the state presenting a very complex tax structure for these products. The quantities which are produced, transported and consumed are simply mammoth. For example, India consumes 96 million litres of Petrol and 266 Million Litres of Diesel per day. These are distributed through more than 50000 retail outlets as well as through many major customers viz., railways, armed forces, road transport corporations, industries etc.