Quick analysis of petroleum's contribution to Centre and states' exchequer

Petroleum's share of taxes not included in GST rose to 20% in FY20. While 40% of this should go to the states, the Centre has been raising cess on petroleum, which isn't shared with states

The GST Council discussed the issue of including petroleum in goods and services tax at its meeting in Lucknow on Friday after the Kerala High Court suggested so. However, the Council decided against it.

The reasons are quite obvious. As can be seen from the chart, the contribution of taxes on petroleum not included in GST rose quite substantially in case of the Centre, at around 20 per cent in 2019-20.

While 40 per cent of this should go to the states, in line with the 14th Finance Commission's recommendations, the Centre has been raising cess on petroleum,