2021 (12) TMI 374 - HC - GST

Applicability of GST on petroleum products - HELD THAT - Even though the matter was taken in the 45th GST Council meeting, three issues seemed to have been considered by the Council, for bringing the petroleum products under the GST regime, i.e., (i) the matter involves high revenue implications, (ii) requires larger deliberations and (iii) during pandemic times, it would be difficult to bring petroleum products under GST regime. We are not satisfied with the reasons. There should be some discussion and genuine reasons, as to why petroleum products cannot be brought under the GST regime. It is well known that even during pandemic period, several decisions were taken involving revenue, after deliberations. Post the matter in the second week of December, 2021.

Summary

Issues: Consideration of bringing petroleum products under the GST regime

Analysis:
The High Court of Kerala, comprising the Chief Justice and another Judge, addressed the issue of bringing petroleum products under the GST regime. The Court noted that in the 45th GST Council meeting, three main issues were considered regarding this matter. Firstly, the Council highlighted the high revenue implications involved in bringing petroleum products under the GST regime. Secondly, it was mentioned that larger deliberations were required before making a decision on this issue. Lastly, the Council indicated that due to the pandemic, it would be challenging to bring petroleum products under the GST regime. However, the Court expressed dissatisfaction with these reasons provided by the Council. The Court emphasized the necessity for detailed discussions and genuine reasons to justify why petroleum products could not be included in the GST regime.

The Court specifically pointed out that citing the pandemic period as a reason for not bringing petroleum products under the GST regime was not acceptable. The Court highlighted that despite the challenges posed by the pandemic, various decisions involving revenue matters had been made after thorough deliberations. Therefore, the Court directed the Standing Counsel for the Central Board of Indirect Taxes and Customs to submit a detailed statement addressing the observations made by the Court and the prayers sought for in this case. The Court scheduled the next hearing for the second week of December 2021, along with another related case. This judgment signifies the Court's insistence on receiving comprehensive justifications and deliberations before making decisions regarding the inclusion of petroleum products in the GST regime.