Petrol costing around 29 rupees is being sold so expensive, it’s because the general public is paying about 53 rupees as tax. Now people hope that the minister of finance will announce something within the budget, which can give some relief to the overall public.
Petrol and diesel prices are touching the sky. Petrol rate in Delhi has crossed 86 rupees a liter. Petrol has crossed Rs 90 in many cities and it seems that it’ll soon hit the century. Petrol costing around 29 rupees is being sold so expensive, it’s because the general public is paying about 53 rupees as tax. Now people hope that the minister of finance will announce something within the budget, which can give some relief to the overall public.
Fierce earnings within the treasury from petrol and diesel
Oil prices are running at record highs within the country. During the lockdown, the demand for oil was reduced considerably, but the govt did wonders to extend its revenue from petroleum by increasing taxes. There was a historical fall within the prices of petroleum , oil companies also benefited from this. India is among the very best 5 countries within the world in terms of the highest tax on petroleum.
Excise duty (sales tax) collection on petrol and diesel has increased tremendously during this fiscal year . From April to November 2020, the government’s excise duty collection increased to Rs 1,96,342 crore, compared to Rs 1,32,899 crore within the year-ago period.
This collection is despite the very fact that in these eight months 10 million tonnes of less diesel was sold. During this era only 49.4 million tonnes of diesel were sold. the govt had increased excise duty on petrol by Rs 13 per liter and on diesel by Rs 16 per liter during lockdown.
Everyone is affected by commoner to transporters
Everyone is affected by commoner to transporters thanks to increase in petrol and diesel prices. During the corona, the commoner is already very upset thanks to salary cuts, work-related problems, now when he’s returning to figure , he has got to bear the brunt of pricy petrol.
Significantly, transporters are already very upset. Toll taxes have increased significantly. His business stalled for months thanks to Corona. thanks to the rise within the prices of petrol and diesel, the freight is additionally increasing. About 55 percent of the value of transporters is fuel.
Transporters and lots of experts say that the govt should reduce excise duty on petrol and diesel to scale back the skyrocketing prices of those fuels. this may provide relief to the distressed people thanks to recession and corona.
Demand for inclusion in GST
A big demand for petrol and diesel is formed that they be brought under the purview of GST. If this happens, the worth of petrol and diesel may fall drastically. the rationale for this is often that the utmost rate of GST is 28 percent.
Even today, if the essential rate of around 29 rupees, petrol in Delhi can come right down to 40 rupees a liter. But during this hour of crisis when the govt has less sources of revenue, the petroleum sector remains a dairy cattle .
How is tax charged now
Right now, the Central Government imposes duty on petrol and diesel and therefore the state governments impose VAT. At an equivalent time, petrol prices increase even more thanks to transport and native body tax in many places. At an equivalent time, there’ll be just one tax on joining GST.
For example, the bottom price of petrol for a dealer in Delhi on January 16 was Rs 28.50 per liter (inclusive of freight etc.). The excise duty on this was Rs 32.98 per liter and VAT was Rs 19.55 per liter, dealer’s commission was Rs 3.67 and therefore the total retail price was Rs 84.60.
In this way, within the petrol of Rs 84.60 a complete tax of Rs 52.53, that is, 62 percent of the tax was only. At the bottom price, this tax becomes 184 percent. Now if it comes under GST and therefore the GST rate of maximum 28% is additionally levied thereon , then the tax on this base price in Delhi are going to be around Rs 8 and after adding the dealer’s commission, petrol are going to be around Rs 40 per liter.
What can the minister of finance do
While petroleum has been engaged for cuts within the excise of the central government, the state governments also will oppose bringing it into GST because it is additionally an enormous source of income within the sort of VAT for them. Many experts are even saying that this point additional cess are often imposed. It are often within the sort of Cess Kovid-19 Cess or the other form. Therefore, it doesn’t seem that the minister of finance are going to be ready to do anything special during this budget. But if they found how out for this, it might be a matter of great relief.