Centre, states at loggerheads over taxes, duties on fuel

In 2014, the excise duty was Rs 9.20 per litre on petrol and Rs 3.46 per litre on diesel. By November 2021, that amount rose to Rs 32.90 and Rs 31.80 respectively. Post that, the Centre has reduced the prices of petrol by Rs 5 per litre and diesel by Rs 10 per litre. With this, the excise duty on petrol and diesel has gone up to Rs 27.90 and Rs 21.80 respectively. The revision of fuel prices began soon after. Last Sunday, petrol and diesel rates per litre in Hyderabad stood at Rs 119.49 and Rs 105.49 respectively.

Hyderabad:Petrol and diesel prices are shooting up every day, making the common man’s life a misery. The Centre and states are at loggerheads over taxes and duties on fuel. VAT and rising Central taxes have added up to the long list of woes of the people. At present, tariffs levied are higher than the base price of the fuel itself.

In 2014, the excise duty was Rs 9.20 per litre on petrol and Rs 3.46 per litre on diesel. By November 2021, that amount rose to Rs 32.90 and Rs 31.80 respectively. Post that, the Centre has reduced the prices of petrol by Rs 5 per litre and diesel by Rs 10 per litre. With this, the excise duty on petrol and diesel has gone up to Rs 27.90 and Rs 21.80 respectively. The revision of fuel prices began soon after. Last Sunday, petrol and diesel rates per litre in Hyderabad stood at Rs 119.49 and Rs 105.49 respectively.

Taxes levied by the Central and State governments are higher than the base price of fuel. The base price of petrol, including supply cost, is Rs 53.94 per litre, while taxes and duties are Rs 61.69. This means that taxes and duties cost Rs 7.75 more than the basic price. The VAT levied by the State government is Rs 33.79 per litre while the excise duty levied by the Centre is Rs 27.90 per litre.

The Telangana government levies 35.20 per cent VAT on petrol and 27 per cent on diesel. The same slab has been in force till 2015. In January 2015, 31 per cent VAT on petrol and 22 per cent on diesel alongside Rs 2 as a cess were levied. In February 2015, the State government made changes to the slab, removing the Rs 2 cess on petrol and diesel. At the same time, it modified the VAT slab. Accordingly, it began imposing 35.20 per cent VAT on petrol and 27 per cent on diesel. The same slab has been in force till date.

Meanwhile, Andhra Pradesh levies 31 per cent VAT on petrol and 22.25 per cent on diesel besides a cess of Rs 5. With 36 per cent VAT and an additional cess, Rajasthan levies the highest tariff on petrol in the country. Telangana ranks second, followed by Karnataka with 35 per cent VAT. The majority of states charge between Rs 2 and Rs 5 in the name of cess. There is no cess in Telangana, however, when it comes to diesel, Odisha tops the list with 28 per cent VAT, followed by Telangana with 27 per cent.

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