Oil Minister Dharmendra Pradhan said he has requested the Ministry of Finance to bring petroleum products under the ambit of Goods and Services Tax (GST) in the interest of consumers.
Justifying the move, he said there has to be a "uniform tax mechanism" all over the country.
"This is the proposal of the Ministry of Petroleum. We have appealed to all the states and finance ministry (to bring petroleum items under GST). Looking into the consumer interest, there must be tax rationalisation. GST is a well thought mechanism by the Government of India and the states, they developed the GST Council...
"There are two kinds of taxes (on petroleum products). One is the central excise and the other one is state VAT. That is the reason we are expecting uniform tax mechanism from the industry point of view," Pradhan told PTI.
Justifying the daily price mechanism which is in place for petrol and diesel, Pradhan said states are getting 42 per cent share in whatever levy is being collected by the Centre and clarified domestic rates are determined by international prices.
"There is no communication gap or mismatch (between domestic and global prices). Whatever is the international price we are passing exactly that to the Indian consumer. When it is increasing, we have to increase, when it is declining we have to decrease it. That is the practice in the country."
The minister for petroleum and natural gas said, "42 per cent of the central tax is coming to states. And states have their own tax mechanism. So a substantial portion of tax collection is utilised and coming to the states."
He said the Centre needs funds for implementing various development and welfare projects in the country.
"Don't you think we should build good roads. Don't you think we should give clean drinking water to citizens. See the spending of the Government of India. Previously, for the housing scheme (for the poor), the government was spending Rs 70,000 per unit. Now we are spending Rs 1.5 lakh.
"Where do you get the money from? Do you think (we) have kept the money in the treasury. We are passing the money for the greater recycling of the economy through infrastructure projects," he explained.
Replying to a query, he said the second round of auction of oil and natural gas blocks received a good response from both international and domestic players.