New Delhi: Madhya Pradesh levies the highest sales tax or VAT on petrol in India. On the other hand, Rajasthan has the highest tax on diesel. This information was given Monday by Oil Minister Hardeep Singh Puri in the Lok Sabha. Heavily taxed petrol and diesel rates have shot to their highest prices this month. Taxes, both central and state, 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. However, 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 excise duty/cess collected (by the Central government) from petrol is Rs 1,01,598 crore. From diesel it is Rs 2,33,296 crore during the financial year 2020-21,” Puri said in a written reply to a question.
State governments, Puri 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 Rs 4.82 per litre and Rs 4.74 a litre, respectively.
Also read: Government earns Rs 94,181 crore from excise duty on petrol, diesel in first 3 months of FY21-22
Madhya Pradesh levies Rs 31.55 a litre VAT on petrol – the highest in India. Rajasthan charges Rs 21.82 VAT a litre on diesel, according to Puri’s reply. Rajasthan levies Rs 29.88 a litre VAT on petrol and Maharashtra charges Rs 29.55.
In the case of diesel, Andhra Pradesh levies Rs 21.78 a litre VAT, Madhya Pradesh Rs 21.68, Odisha Rs 20.93, and Maharashtra charges Rs 20.85 a litre.
“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 stated.
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 – Rs 7.59 a litre on petrol and Rs 5.48 on diesel in the last year, according to Puri’s reply. It was followed by neighbouring Telangana that gained Rs 5.77 on petrol and Rs 4.08 on diesel. Madhya Pradesh gained Rs 5.65 a litre on petrol and Rs 3.65 on diesel. Delhi gained Rs 4.94 a litre on petrol, but because it had cut taxes on diesel, its per litre revenue came down by Rs 5.69.
In absolute revenue, which is also dependent on total sales made in the state, Rajasthan saw its VAT revenue rise by Rs 1,800 crore to Rs 15,119 crore in 2020-21 over the previous year.
Madhya Pradesh witnessed its revenue boost by Rs 1,188 crore to Rs 11,908 crore, while the Rs 846 crore addition took Andhra Pradesh’s VAT revenue to Rs 11,014 crore.
