Madras High Court Seeks Centre's Response On Plea To Bring Petrol, Diesel Under GST Regime For Uniform Pricing Pan India

Though the bench of Acting Chief Justice D Krishnakumar and Justice PB Balaji initially said that it was the policy decision of the Government, the court later asked the central government to respond to the plea within 4 weeks.

The court was hearing a plea by Advocate C Kanagaraj. Kanagaraj said that the petition addresses the effects of continuously rising prices of petrol, diesel, and liquified natural gas in India on the vast population, its broader economy and the individual consumers.

Kanagaraj stated that fuel is a critical energy source for various industries and sectors in the economy. He added that transportation across the country relies heavily on fuel and fluctuations in price can have a cascading effect on the cost of shipping goods and general transport. He further stated that fuel impacts the production of a wide range of goods also as it is used by numerous industries, organizations, power plants, and agricultural machinery. He further pointed out that despite importing oil at a discounted price from Russia, fuel prices in India remained higher than other developing countries in Asia and Africa.

Kanagraj stated that the cascading effect of increasing fuel prices would ultimately burden the consumers as it would affect their purchasing power. He added that the increasing cost across various sectors would create a ripple effect throughout the economy. He also stated that the soaring inflation can negatively impact the Gross Domestic Product.

Kanagaraj pointed out that taxes on petrol and diesel account for more than two-thirds of retail fuel prices and is one of the biggest sources of revenue for the government. However, Kanagaraj added that the current administration has exhibited limited initiative to reduce petrol and diesel prices during the election period even when the crude oil prices dropped and import costs decreased.

Kanagaraj submitted that since 2014, petrol subsidies have been abruptly stopped and instead the government has shifted to a new policy of petroleum bonds in order to support the oil companies from loss without any direct benefits. He added that the high cost associated with the production and supply of petroleum due to high taxes impacts the common people directly especially the low-income households who are struggling financially.

Thus, considering the widespread outcry in India to bring fuel under the GST regime, Kanagaraj urged the court to direct the government to reduce the petrol, diesel, gas, and oil prices by bringing down the taxes under the uniform GST policy cover by fixing uniform prices across India with the grant of regular subsidy.

Case Title: C Kanagaraj v The Chief Secretary and Others

Case NO: WP No. 26383 of 2024