NEW DELHI: As fuel prices remain high, Oil Minister Hardeep Singh Puri said Monday that Madhya Pradesh has the highest sales tax or VAT on gasoline in the country, while Rajasthan has the highest tax on diesel.
In a written response to a question in Lok Sabha, the recently appointed Minister of Oil said that state governments are adding value added tax (VAT) to the total amount of the base price and central taxes for gasoline and diesel.
Madhya Pradesh charges 31.55 rupees per liter of VAT on gasoline, the highest in the country, while Rajasthan charges 21.82 rupees per liter of diesel.
“Excise taxes (from the central government) on gasoline will be 1.01.598 billion rupees and diesel will be 2.33.296 million rupees for fiscal 2020-21 (which ended March 31, 2021),” Puri said.
The dispensing price for fuel has been static since July 18th as the oil marketers (OMCs) have suspended the price revision for the past 9 days.
However, fuel prices remain on the higher side, with gasoline prices exceeding Rs 100 per liter on all major subways.
Tax rates on fuel
Both central and state taxes account for 55 percent of the retail price of gasoline and 50 percent of diesel tariffs.
The central government levies a fixed excise tax of 32.90 rupees per liter on gasoline and 31.80 rupees per liter on diesel.
While states impose an ad valorem VAT rate, which essentially means that taxes per liter go up when prices go up and go down when rates go down.
“The overall excise / excise incidence as a percentage of retail gasoline and diesel sales is 32.4 percent and 35.4 percent, respectively, on July 16, 2021,” Puri said.
Rajasthan charges Rs 29.88 per liter of VAT on gasoline and Maharashtra charges Rs 29.55.
In the case of diesel, Andhra Pradesh levies VAT 21.78 rupees per liter, Madhya Pradesh 21.68 rupees, Odisha 20.93 rupees and Maharasthra 20.85 rupees per liter.
While the Andaman and Nicobar Islands have the lowest sales tax on gasoline and diesel of 4.82 rupees per liter and 4.74 rupees per liter, respectively.
The retail gasoline retail price of 101.54 rupees per liter in Delhi is composed of 32.90 rupees per liter of central consumption tax and 23.43 rupees of state sales tax.
Likewise, in the case of diesel, 31.80 rupees per liter are central consumption taxes and 13.14 rupees are the state value added tax in the retail price of 89.87 rupees.
“Revenue generated is used for welfare development programs”
Puri further highlighted that central and state tax revenues are used for various government development programs, such as the Pradhan Mantri Gram Sadak Yojana (PMGSY) road construction program, the Pradhan Mantri Ujjawala Yojana (PMUY) LPG free link program, Ayushman Bharat and Pradhan Mantri Garib Kalyan Yojana (PMGKY).
It is also used to help the poor during a pandemic from programs such as Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), under which 80 crore beneficiaries received free ration from April 2020 to November 2020 and May-June 2021, free vaccination against Covid -19.
He also noted that over the past seven years, road construction per day in India has increased nearly three times from 12 km / day in 2014-15 to 33.7 km / day in 2020-21, suggesting that road construction is used for infrastructure development, which also generates employment.
(With contributions from agencies)