The Modi Government is working out a framework to bring Petrol and Diesel under GST. Well for those who wished it, they may not be happy the way the government wants to do it. According to reports there will be an extra VAT levied on the tax slab decided for it under GST which is most likely to be the 28% slab(the highest one) and VAT rates could be 14% or 16% which would make it nearly same but the decision will make petrol and diesel prices same throughout the country. All over the world wherever Petrol and Diesel come under GST they have an additional tax or taxes on it and that's why the government may go for it the way others have done it. While it will certainly benefit people in states such as Maharashtra were state charges about 39% of the value of petrol and Telangana which charges 25% on diesel in addition to central excise amounting Rs 19. To understand the current Petrol and Diesel price buildup in your state you may go here. States also get a huge share from the excise duty collected by Central Government near about half of it. Arun Jaitley also pointed it out in a post on Facebook on Monday.

To do this Central Government has to give up about Rs 20000 crore share of its input credit and State Governments to have to give up a substantial share of their taxes to let it happen. The Modi Government has maintained a practice where all decisions of GST council have been taken unanimously and would like to keep it so, therefore a decision on this may only happen when all the Finance Ministers agree to it.

GST being an ad valorem tax (i.e according to the value of the goods) it swings both sides that means the value of Petrol and Diesel will rise with an increase in the price of crude in International Market and will come down with the decrease in the price of crude in International Market.

A point to be noted is that even after implementation of GST the taxes on most of the goods amount the same.

The other petroleum products like jet fuel, kerosene, natural gas are not being considered to be under GST ambit right now.