|Only 9 rupees can be cheaper Petrol-Diesel|
New Delhi – Petrol and diesel prices are on seventh level. The government is working on several options to reduce prices. However, no concrete decision has been taken so far. Talking about bringing gasoline and diesel into GST Petrol-diesel may also be brought under the purview of GST soon. However, VAT on petrol and diesel will not end even when GST arrives. Rather the state will also charge VAT with GST If this was possible, the combination tax of GST and VAT of states could be on petrol and diesel. After this, petrol will be cheaper by 9 rupees in the national capital Delhi than the current rate. How to make 9 rupees cheaper Petrol, read below to understand its calculation.
Tax will be equal to existing tax
According to a senior government official, the GST regime is preparing to tax on both auto fuel. The maximum rate for the GST will be 28 per cent tax. If petrol and diesel are brought under the GST, then the maximum 28 percent GST rate on both the fuels and the local sales tax or VAT of the states may take place. With the highest GST rate (28%), the VAT will be equal to the existing tax. In this, the excise duty of the center will be included.
Decide on input tax credit
According to the official, if both the fuel is brought under the purview of GST, then the Center will have to give an input tax credit of 20000 crores. The credit must be left out of the input tax credit after the exit of petrol, diesel, natural gas, jet fuel and crude oil from Goods and Services Tax (GST) applied from 1 July 2017.
Pure GST is not anywhere on petrol and diesel
According to an official involved in the implementation of the GST, there is no pure GST anywhere in the world on petrol and diesel. Therefore, it can also be combination of GST and VAT in India. He said timing to incorporate petroleum products into GST would be politically important. The decision will be taken by both the Center and the states together.
What is the tax situation
In the current situation, the central government levies an excise duty of Rs 19.48 per liter on petrol and Rs 15.33 per liter on diesel. Apart from this, value added tax (VAT) is levied from the states. In case of local tax levy, it is at the forefront of Andaman and Nicobar, where tax is charged on 6-6 percent of sales tax on both fuels.
Where does VAT seem
VAT in Mumbai is the highest at 39.12 percent on petrol. At the same time, most of the 26 percent VAT is charged on diesel in Telangana. Delhi charges 27 per cent on petrol and 17.24 per cent VAT on diesel. Thus, 45-40 per cent of petrol and 35-40 per cent tax on diesel is charged.
Delhi is priced in petrol like this now
- If gasoline and diesel are levied on petrol and diesel, then petrol in Delhi can be cheaper by upto 9 rupees.
- In the current situation, the price of petrol in the capital is 80.73 rupees.
- After the refining, the basic price of petrol is 40.45 rupees (both crude base price and refining fees)
- Dealer commission of Rs. 3.64 per liter on this
- Excise duty 19.48 per liter
- Delhi 27% VAT i.e. 17.16 rupees per liter
- Total Tax (Excise + VAT) Rs. 36.64
- The price of petrol is 80.73 rupees per liter.
Status on GST + VAT
- After the refining, the dealer gets gasoline at Rs 40.45 per liter.
- Dealer commissioned at Rs. 3.64
- Maximum GST of 28% on petrol, then the rate is 12.34 rupees per liter
- 27% VAT in Delhi, which is Rs. 15.23 per liter
- Total aggregate tax (GST + VAT) 27.57
- In this situation, the price of gasoline that is available to ordinary people can be Rs. 71.66.
- 9.07 cheaper petrol than current rate of 80.73 rupees per liter
Note: For the calculation, the price of petrol has been taken from Delhi and has been added in Delhi’s VAT terms.
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