Government may allow GST input credit on all inputs, input services and capital goods being paid by them even though the output petroleum products including petrol, diesel, ATF remain outside the new indirect tax framework. “This is a very good proposal that would allow relief from additional tax burden to the tune of Rs 25,000 crore on oil marketing companies at present. The problem is coming as sector’s input are in GST system where tax set-off is available but final product is outside the GST system where credit on inputs is not allowed. Tax credits won’t be transferable between the two systems,” said an executive of public sector oil company asking not to be named. FICCI has pitched for provision of credit of GST against excise duty on petroleum products as a temporary measure till all products get into the indirect tax system.
