FM Sitharaman: Petrol, Diesel & Alcohol Unlikely To Come Under GST Soon

Finance Minister Nirmala Sitharaman clarified that petrol, diesel, and alcohol are unlikely to be brought under GST in the near future due to revenue implications for states. She noted that these items remain critical for state finances, contributing substantially to excise and VAT collections, and any shift to GST would require consensus in the GST Council. While the industry has long demanded inclusion to create a unified tax regime, political and fiscal sensitivities make it challenging. Sitharaman emphasized that the government remains committed to rationalizing GST and simplifying compliance, but sensitive items will continue under the current system. Analysts believe the exclusion maintains fiscal federalism while leaving scope for gradual reform.