Petroleum products would, however, continue to be taxed as per the current taxation regime until the GST Council agrees on applying GST to these products. However, GST will apply on petroleum only after all the states, through the GST Council, is agreed on it and till then states will continue to tax petroleum products.

Under the existing regime, the taxation of petroleum products and liquor is shared between the Centre and states. Their inclusion has been a matter of lengthy debate between the Centre and states, as the latter feared a loss of autonomy in taxing these products and an erosion of revenue base under the GST’s standardized rate model.