Madhya Pradesh levies the highest sales tax or VAT on petrol in the country, while Rajasthan has the highest tax on diesel, Oil Minister Hardeep Singh Puri told the Lok Sabha on July 26.
Heavily-taxed petrol and diesel rates have shot to their highest prices this month. Taxes, both central and State, make up for 55% of the retail price of petrol and 50% of diesel rates.
While the central government levies a fixed excise duty of ₹32.90 a litre on petrol and ₹31.80 a litre on diesel, States charge an ad valorem rate of VAT that results in per-litre tax going up when prices rise, and falling when rates come down.
“The excise duty/cess collected (by the central government) from petrol was ₹1,01,598 crore and from diesel is ₹2,33,296 crore during the financial year 2020-21 (that ended on March 31, 2021),” Mr. Puri said in a written reply to a question.
State governments, he said, levy VAT on the total amount of base price and central taxes of petrol and diesel.
The lowest VAT on petrol and diesel is in Andaman and Nicobar Islands at ₹4.82 and ₹4.74 per litre respectively.
Madhya Pradesh levies VAT of ₹31.55 a litre of petrol — the highest in the country, while Rajasthan charges ₹21.82 a litre on diesel, according to Mr. Puri’s reply.
Rajasthan levies ₹29.88 a litre VAT on petrol and Maharashtra charges ₹29.55.
In the case of diesel, Andhra Pradesh levies ₹21.78 a litre VAT, Madhya Pradesh ₹21.68, Odisha ₹20.93, and Maharasthra ₹20.85.
The petrol retail selling price of ₹101.54 per litre in Delhi is made up of ₹32.90 a litre central excise duty and ₹23.43 State VAT. In the case of diesel, ₹31.80 a litre is central excise and ₹13.14 is State VAT in the final retail selling price of ₹89.87.
“The total excise duty/cess incidence as a percentage of retail selling on petrol and diesel is 32.4% and 35.4% respectively, as on July 16, 2021,” Mr. Puri said.
He said the revenue generated by such 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 the pandemic through schemes like Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), under which free ration was provided to 80 crore beneficiaries from April 2020 to November 2020 and May-June 2021, free vaccination for COVID-19 etc,” he said.
The relentless price-rise over the last year has meant that most States gained on taxes unless they cut levies.
Andhra Pradesh gained the most — ₹7.59 a litre on petrol and ₹5.48 on diesel in the last year, according to Mr. Puri.
It was followed by neighbouring Telangana that gained ₹5.77 on petrol and ₹4.08 on diesel. Madhya Pradesh gained ₹5.65 a litre on petrol and ₹3.65 on diesel.
Delhi gained ₹4.94 a litre on petrol, but because it had cut taxes on diesel, its per-litre revenue came down by ₹5.69.
North-eastern States of Meghalaya, Nagaland and Assam too saw per-litre revenue fall.
In absolute revenue, which is dependent on total sales made in the State, Rajasthan saw its VAT revenue rise by ₹1,800 crore to ₹15,119 crore in 2020-21, over the previous year.
Madhya Pradesh witnessed its revenue boost by ₹1,188 crore to ₹11,908 crore, while the ₹846 crore addition took Andhra Pradesh’s VAT revenue to ₹11,014 crore, according to the reply. Uttar Pradesh saw its revenue rise by ₹1,844 crore to ₹21,956 crore in FY21.
Delhi saw its VAT revenue fall by ₹1,180 crore to ₹2,653 crore, while Maharastra had its kitty shrunk by ₹1,361 crore to ₹25,430 crore.
Tamil Nadu’s revenue fell by ₹1,112 crore to ₹17,063 crore.
