Petroleum dealers press for GST tax regime

Petroleum dealers in the State have urged the Central and State governments to switch over to the Goods and Service Tax (GST) or any other uniform tax regime all over the country. This follows a peaceful protest staged a few days ago by a section of dealers from certain States in North India at Delhi pressing this and other demands.
“Uniform taxes would mean consumers living near State borders need not go to neighbouring States just to purchase fuel. Right now, price differences do matter due to varied Value Added Tax rates. Dealers near borders too would benefit from this,” explained K. P. Murali, president, Tamil Nadu Petroleum Dealers Association.
Another long-pending demand of dealers has been an increase in their margins. The Apoorva Chandra Committee that submitted its report in 2016, had said that for a dealer to break even, the outlet has to sell 170 kilo litres per month. According to estimates, such a dealer would get ₹27,500 as remuneration per month and 5 paise per litre on diesel and 7 paise per litre on petrol, which works out to ₹6,377 per month.
A dealer explained that expenses including for internet, local government taxes, fire fighting equipment, point of sale machine expenses and internet charges were not included in the 34 paise being provided per litre as operating cost to them. However, there are dealers who sell lesser than 110KL a month.
A low-volume dealer said that in 2017, he paid his employees ₹7,000 a month as salary and was currently paying ₹11,500. “But my margin has not increased despite the committee suggesting an increase in margins every six months. The number of retail outlets has increased to 86,000 pan India. The competition is stiff. The oil marketing companies have called for tenders for new outlets and some of them are very close to my outlet. Any chance of my business picking up seems very distant,” he said.

There are around 6,500 retail outlets in Tamil Nadu that sell fuel supplied by the State-run oil marketing companies.