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Article
Policy Options for Including Petroleum, Natural Gas and Electricity in the Goods and Services Tax
Economic and Political Weekly (2015)
  • Sacchidananda Mukherjee
  • R. Kavita Rao
Keywords
  • goods and services tax,
  • value added tax,
  • tax cascading,
  • tax incidence analysis,
  • ad valorem tax,
  • input-output analysis,
  • revenue neutral rates,
  • taxation of petroleum products,
  • India.
Publication Date
February 28, 2015
Publisher Statement
This study analyses the impact of keeping crude petroleum, natural gas, motor spirit (gasoline/petrol), high speed diesel (diesel), aviation turbine fuel and electricity out of the value added tax scheme. Specifically, the paper finds that keeping these items out of the input tax credit mechanism (either partially or fully) would result in cascading. Through an input–output framework, this study proposes some alternatives to the proposed design of the Goods and Services Tax and assesses the implications for cascading and prices. It captures the degree of cascading across 48 sectors under different scenarios and explores alternative policy options to phase out under-recoveries of oil marketing companies on account of sales of diesel and petrol under the administered pricing mechanism.
Citation Information
Sacchidananda Mukherjee and R. Kavita Rao. "Policy Options for Including Petroleum, Natural Gas and Electricity in the Goods and Services Tax" Economic and Political Weekly Vol. 50 Iss. 9 (2015)
Available at: http://works.bepress.com/sacchidananda_mukherjee/71/