High Court of Kerala scrutinizes GST inclusion of petroleum products, demands detailed justifications

The High Court of Kerala addressed the issue of bringing petroleum products under the GST regime. The Court expressed dissatisfaction with reasons provided by the GST Council and emphasized the need for detailed discussions and genuine justifications. It deemed citing the pandemic as a reason unacceptable, noting that revenue decisions had been made during the pandemic. The Court directed the Standing Counsel to submit a detailed statement addressing its observations. The next hearing was scheduled for December 2021. This judgment underscores the Court's insistence on comprehensive deliberations before deciding on including petroleum products in the GST regime.

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Issues: Consideration of bringing petroleum products under the GST regime

Analysis:
The High Court of Kerala, comprising the Chief Justice and another Judge, addressed the issue of bringing petroleum products under the GST regime. The Court noted that in the 45th GST Council meeting, three main issues were considered regarding this matter. Firstly, the Council highlighted the high revenue implications involved in bringing petroleum products under the GST regime. Secondly, it was mentioned that larger deliberations were required before making a decision on this issue. Lastly, the Council indicated that due to the pandemic, it would be challenging to bring petroleum products under the GST regime. However, the Court expressed dissatisfaction with these reasons provided by the Council. The Court emphasized the necessity for detailed discussions and genuine reasons to justify why petroleum products could not be included in the GST regime.

The Court specifically pointed out that citing the pandemic period as a reason for not bringing petroleum products under the GST regime was not acceptable. The Court highlighted that despite the challenges posed by the pandemic, various decisions involving revenue matters had been made after thorough deliberations. Therefore, the Court directed the Standing Counsel for the Central Board of Indirect Taxes and Customs to submit a detailed statement addressing the observations made by the Court and the prayers sought for in this case. The Court scheduled the next hearing for the second week of December 2021, along with another related case. This judgment signifies the Court's insistence on receiving comprehensive justifications and deliberations before making decisions regarding the inclusion of petroleum products in the GST regime.

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