In a written reply to a question in Lok Sabha, the recently appointed oil minister said that state governments levy value added tax (VAT) on the total amount of base price and central taxes of petrol and diesel.
Madhya Pradesh levies Rs 31.55 a litre VAT on petrol which is the highest in the country, while Rajasthan charges Rs 21.82 a litre on diesel.
“The excise duty/cess collected (by the Central government) from petrol is Rs 1,01,598 crore and from diesel is Rs 2,33,296 crore during the financial year 2020-21 (that ended on March 31, 2021),” Puri said.
The pump price of fuel has been static since July 18 now as oil marketing companies (OMCs) have paused price revision since last 9 days.
However, fuel prices continue to remain on the higher side with price of petrol crossing Rs 100 per litre mark in all major metros.
Tax rates on fuel
Both central and state taxes make up for 55 per cent of the retail price of petrol and 50 per cent of diesel rates.
The central government levies a fixed excise duty of Rs 32.90 a litre on petrol and Rs 31.80 a litre on diesel.
While, states charge an ad valorem rate of VAT that essentially results in per litre tax going up when prices rise, and falling when rates come down.
“The total excise duty/cess incidence as a percentage of retail selling on petrol and diesel is 32.4 per cent and 35.4 per cent, respectively, as on July 16, 2021,” Puri said.
Rajasthan levies Rs 29.88 a litre VAT on petrol and Maharashtra charges Rs 29.55.
In case of diesel, Andhra Pradesh levies Rs 21.78 a litre VAT, Madhya Pradesh Rs 21.68, Odisha Rs 20.93, and Maharasthra charges Rs 20.85 a litre.
Whereas, Andaman and Nicobar Island charges lowest VAT on petrol and diesel at Rs 4.82 per litre and Rs 4.74 a litre, respectively.
The petrol retail selling price of Rs 101.54 per litre in Delhi is made up of Rs 32.90 a litre central excise duty and Rs 23.43 state VAT.
Similarly, in case of diesel, Rs 31.80 a litre is central excise and Rs 13.14 is state VAT in the final retail selling price of Rs 89.87.
‘Revenue generated used for welfare developmental schemes’
Puri further highlighted that revenue generated by central and state taxes is used for various developmental schemes of the government like road-building scheme Pradhan Mantri Gram Sadak Yojana (PMGSY), free LPG connection programme Pradhan Mantri Ujjawala Yojana (PMUY), Ayushman Bharat and Pradhan Mantri Garib Kalyan Yojana (PMGKY).
It is also used to provide relief to the poor during pandemic by schemes like Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) under which free ration was provided to 80 crore beneficiaries during April 2020 to November 2020 and May-June 2021, free vaccination for Covid-19.
He also noted that over the last seven years, highway construction per day in India increased almost 3 times from 12 km/day in 2014-15 to 33.7 km/day in 2020-21, indicating that cess is used for infrastructure development which also generates employment.
(With inputs from agencies)