Issues : Petrol Pump Dealers

[SHYAM PATHAK]

Dear Sir,

Petroleum retailers (Petrol Pump Operators) are selling Diesel, Petrol and Lubricants. All dealers are GST registered dealers. Dealers are paying LFR (Rent for using Licence, Machinery, Land etc) to Oil Marketing Companies (OMC). OMCs are charging SGST and CGST form dealers by raising TAX Invoices to dealers. Dealers are also selling lubricants (18% GST slab)

May dealer accumulate ITC paid on LFR after adjusting GST payable (lubricants), considering that components of lubricant sales is very nominal ?

Some Tax experts are saying that accumulation of ITC become very high and NOT possible to adjust in Current FY or something like that. Is this Statement has some Legal ground ?

AI Summary

Petrol Pump Dealers Struggle with ITC Accumulation Under GST; Reversal Needed for Exempt Supplies A discussion on a forum addresses the issue of Input Tax Credit (ITC) accumulation for petrol pump dealers under the Goods and Services Tax (GST) regime. Dealers, who sell diesel, petrol, and lubricants, face challenges in utilizing ITC due to the non-taxable nature of petroleum products. Experts discuss that while ITC can accumulate, it cannot be refunded unless specific conditions are met, such as exports. The consensus suggests that ITC may need to be reversed for exempt supplies, and the situation might change if petroleum products are brought under GST. The debate also highlights the distinction between non-taxable and non-GST supplies.