Though the Centre has cut the excise duty on petrol and diesel thus bringing down the retail prices of the fuels, states, except a few, have not yet followed the suit. This has also left state taxes higher than the central levies on fuels. Here’s the full break-up of taxes one pays on petrol and diesel:
Following the excise duty cut, the price of petrol in Delhi on Tuesday stood at Rs 96.72 a litre as against Rs 105.41 a litre earlier, while diesel cost Rs 89.62 a litre as opposed to Rs 96.67 earlier. All states across the country have witnessed the price fall after the duty cut by the Centre. Over and above this, Maharashtra, Rajasthan and Kerala have also cut value-added taxes, thus bringing down the fuel prices even further.
Break-up of Taxes, Other Charges on Petrol
Let’s take an example of Delhi where the petrol price is Rs 96.72 per litre. In the overall retail price, Rs 57.13 per litre is the base price and 20 paise is levied as a freight charge. The two components add up to Rs 57.33, which is a price charged to dealers and excludes the Centre’s excise duty and the state’s value-added tax (VAT).
Now, the latest excise duty of Rs 19.90 per litre is levied along with an average dealer commission of Rs 3.78 a litre. Apart from this, the VAT (including VAT on dealer commission) of Rs 15.71 is charged on every litre of petrol. So, finally, all these components (base price, freight charges, excise duty, dealer commission and VAT) add up to the petrol retail price of Rs 96.72 a litre in Delhi.
Break-up of Taxes, Other Charges on Diesel
Let’s take an example of Delhi where the diesel price is Rs 89.62 per litre. In the overall retail price, Rs 57.92 per litre is the base price and 22 paise is levied as a freight charge. The two components add up to Rs 58.14, which is a price charged to dealers and excludes the Centre’s excise duty and the state’s value-added tax (VAT).
Now, the latest excise duty of Rs 15.80 per litre is levied along with an average dealer commission of Rs 2.57 a litre. Apart from this, the VAT (including VAT on dealer commission) of Rs 13.11 is charged on every litre of petrol. So, finally, all these components (base price, freight charges, excise duty, dealer commission and VAT) add up to the diesel retail price of Rs 89.62 a litre in Delhi.
Depending upon the prevailing VAT rates, petrol and diesel prices may vary from state to state. After the Centre’s decision to cut excise duty on Saturday, several states including Maharashtra, Rajasthan and Kerala also announced to cut the VAT on the auto fuels. It has reduced the petrol and diesel prices in these states more than other states.
While announcing the decision to cut the excise duty on the fuels, Finance Minister Nirmala Sitharaman on Saturday said in a tweet, “We are reducing the central excise duty on petrol by Rs 8 per litre and on diesel by Rs 6 per litre. This will reduce the price of petrol by Rs 9.5 per litre and of diesel by Rs 7 per litre. It will have a revenue implication of around Rs 1 lakh crore per year for the government.”
Sitharaman on Sunday also said the excise duty on petrol and diesel that has been deducted by the Centre is not shareable with states. In another tweet, Sitharaman has said, “Basic Excise Duty (BED), Special Additional Excise duty (SAED), Road & Infrastructure Cess (RIC) and Agriculture & Infrastructure Development Cess (AIDC) together constitute Excise Duty on petrol and diesel. Basic ED is sharable with states. SAED,RIC & AIDC are non-sharable.”
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