Covid-19 may prompt states to hold on to revenue sources outside GST

Given the states limited capacity to mobilise revenues, it will be difficult to bring oil, fuel and tobacco under the purview of GST in the near future

Over the past few days, a number of states have taken advantage of tipplers flocking to reopened liquor outlets by increasing tax levied on alcohol. On Monday, Delhi announced a 70 per cent ‘Corona’ levy on alcohol. This was followed by Karnataka on Wednesday, as it hiked the excise duty on alcohol to 17 per cent.

Meanwhile, petrol and diesel prices have been raised in 14 states, including Delhi, Rajasthan and Karnataka, since late March.

These actions just go to shows how important items outside the goods and service tax (GST) like petroleum products, tobacco and alcohol, are for states. And