Given below are two statements : one is labelled as Assertion (A) and the other is labelled as Reason (R). Assertion (A) : Prices of diesel and petroleum products are different in different states of India. Reason (R) : The above products have not yet been brought under the coverage of GST by the GST Council. In the light of the above statements, choose the most appropriate answer from the options given below :
Assertion (A) Analysis
Assertion (A) states that prices of diesel and petroleum products differ across various states in India. This statement is factually correct. Prices vary because state governments impose different rates of taxes, primarily Value Added Tax (VAT), on these commodities.
Reason (R) Analysis
Reason (R) states that diesel and petroleum products are not yet included under the Goods and Services Tax (GST) regime, as decided by the GST Council. This statement is also factually correct. These products are currently outside the purview of GST.
GST Impact on Price Variation
The exclusion of diesel and petroleum products from GST is the direct cause for the price differences observed among states. Under a unified GST system, tax rates would be uniform, leading to more consistent prices. Since they are not under GST, states retain the authority to set their own VAT rates, resulting in the price discrepancies highlighted in Assertion (A). Thus, Reason (R) serves as the correct explanation for Assertion (A).
Conclusion
Both Assertion (A) and Reason (R) are accurate statements, and Reason (R) correctly explains why Assertion (A) is true.
Important Questions from Goods and Services Tax (GST)
Which of the following is an Indirect Tax in India?
Goods and Service Tax is an example of ________.
Which of the following is an example of revenue receipt of the government?
The Goods and Services Tax, Act commenced from ______.
What kind of a tax is GST?
