NEW DELHI: The total incidence of taxes on petrol has come down to 50 per cent and that on diesel to 40 per cent following a reduction in excise duty by the central government, and by a slightly higher proportion in states that have also cut local sales tax or VAT on the fuel.
The retail price of petrol and diesel is decided after adding central excise, commission paid to dealers and value-added tax (VAT) to basic oil prices. The basic oil price is the prevailing international benchmark rate plus freight.
On November 1, prior to the duty cuts, central excise of Rs 32.90 a litre and VAT of 30 per cent in Delhi made up for 54 per cent of the retail selling price of diesel, according to price build-up of the fuel available from state-owned fuel retailers.
This, after the Rs 5 per litre reduction in excise duty, has come down to 50 per cent in Delhi.
Two dozen states and UTs have matched the central government’s excise cuts with a VAT reduction. And, in those states, the percentage of taxes in retail price will be marginally lower. Delhi has not yet lowered the VAT.
Similarly, on diesel, the central excise duty of Rs 31.80 per litre and 16.75 per cent of VAT plus air ambience charges of Rs 250 per kilolitre, brought the total incidence of taxation in Delhi to 48 per cent.
This, after the Rs 10 a litre cut in excise duty, has come down to 40 per cent in Delhi. In cases that have cut VAT, the incidence will be even lower.
This story is from the November 08, 2021 edition of Millennium Post Delhi.
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This story is from the November 08, 2021 edition of Millennium Post Delhi.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
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