How is the petrol price determined?
Posted on: 17/Sep/2018 4:19:28 PM
When making the retail purchase of petrol and diesel from the public sector Oil Corporations, the public need to pay double as per the price fixed by the oil corporations. This aspect is mainly due to the Kalal Tax, VAT (Value Added Tax), and Sales Tax which are additional.
As a substantial amount of revenue occurs through the sales of the petroleum products, the state governments refused the proposal to include petrol and diesel in the GST domain. Presently, petrol and diesel are sold at double the rate on retail purchase per litre.
A kalal Tax of Rs. 19.48 is levied on ordinary petrol per litre and a Kalal Tax of Rs. 20.66 is levied for retail purchase of branded petrol per litre. Kalal Tax on retail purchase of ordinary diesel is Rs. 15.33 per litre and on retail purchases of branded diesel, it is Rs. 17.69 per litre.
The Value Added Tax – VAT – differs for petrol and diesel from one state to another. The highest VAT is in the state of Maharashtra.
In urban areas such as Mumbai and Thane, VAT is 39.12% for petrol and 24.78% for diesel. Other than Mumbai, VAT is fixed at 38.11% for petrol and 24.78% for diesel.
Madhya Pradesh stands at 2nd position in the highest VAT – it is 35.78% for petrol and 23.22% for diesel.
Punjab is in the 3rd place – VAT is 35.12% for petrol and 16.74% for diesel.
Tamil Nadu is in the 6th place – VAT is 32.16% for petrol and 24.80% for diesel.
The state government of Tamil Nadu earns revenue of Rs. 14000 Crores per year through these taxes on petroleum products.
Goa is the state where minimum VAT is fixed. For petrol, it is 16.66% and for diesel, 18.88%.
In Andhra, VAT was 35.77% for petrol and 28.08% for diesel.
The main impact on the price of petrol and diesel in from the commission offered to the dealers. The commission for petrol per litre is Rs. 3.65 and for diesel, it is Rs. 2.62 per litre.
Pakistan sells petrol at Rs. 57.83 per litre. Petrol price is also lesser in countries like Sri Lanka, Nepal, and Bangladesh as compared to India.
