Petrol pumps are an unusual GST case: their main product is outside GST altogether. Petrol and diesel are still under the old VAT regime, not GST — but almost everything else a pump does sits within GST, which creates a specific input-credit complication worth understanding.
Why fuel is outside GST
Petrol, diesel and a few other petroleum products have been kept outside GST for now — they’re taxed under state VAT and central excise instead. So the sale of petrol and diesel at the pump does not attract GST. This is why a petrol pump’s core turnover sits in a different tax system from the rest of its activity.
The taxable side of a pump
Everything around the fuel is usually within GST: lubricants and oils, the convenience store/shop, air and water services with charges, servicing, and commissions. If these taxable supplies cross the threshold, GST registration is required for them — so many pumps need GST even though their main product doesn’t attract it.
The input-credit catch
- Because fuel sales are non-GST, input credit relating to that activity is generally restricted
- Credit and output must be segregated between the GST and non-GST sides
- Lubricants and shop stock carry normal GST with normal credit
- Getting the segregation right is the whole compliance job here