Good news: Petrol will be cheaper till 11 rupees, Modi government can take the decision soon
The government is working on several options to cheaper the cost of petrol and diesel, but now it is expected that a decision can be taken on this. However, this decision will be made by the Center’s Modi government and state governments together. Petrol-diesel may soon be brought under the purview of GST. However, VAT on petrol and diesel will not end even when GST arrives. Rather the state will also charge VAT with GST If this was possible, the combination tax of GST and VAT of states could be on petrol and diesel. But, in spite of this, petrol in its national capital Delhi will be cheaper up to Rs 11. How to make petrol cheaper at 11 rupees, read below to understand its calculation.
Tax will be equal to existing tax
According to a senior government official, the GST regime is preparing to levy tax on both auto fuel. The maximum rate for the GST will be 28 per cent tax. If petrol and diesel are brought under the GST, then the maximum 28 percent GST rate on both the fuels and the local sales tax or VAT of the states may take place. With the highest GST rate (28%), the VAT will be equal to the existing tax. This will include the excise duty of the center and the VAT of the states.
Decide on the input tax credit will take over
According to the official, if both the fuel is brought under the purview of GST, then the Center will have to give an input tax credit of 20000 crores. This credit is ready to leave the input tax credit made after the exit of petrol, diesel, natural gas, jet fuel and crude oil from Goods and Services Tax (GST) effective from 1 July 2017.
There is nowhere on petrol-diesel Pure GST
According to an official involved in the implementation of the GST, there is no pure GST anywhere in the world on petrol and diesel. Therefore, it will be the combination of GST and VAT in India too. He said timing to incorporate petroleum products into GST would be politically important. The decision will be taken by both the Center and the states together.
What is the tax situation?
In the current situation, the central government levies an excise duty of Rs 19.48 per liter on petrol and Rs 15.33 per liter on diesel. Apart from this, value added tax (VAT) is levied from the states. In case of local tax levy, it is at the forefront of Andaman and Nicobar, where tax is charged on 6-6 percent of sales tax on both fuels.
Where does it seem VAT?
VAT in Mumbai is the highest at 39.12 percent on petrol. At the same time, most of the 26 percent VAT is charged on diesel in Telangana. Delhi charges 27 per cent on petrol and 17.24 per cent VAT on diesel. Thus, 45-40 per cent of petrol and 35-40 per cent tax on diesel is charged.
Petrol in Delhi will cost Rs 11!
If GST and VAT are levied on petrol and diesel, petrol in Delhi can be cheaper up to Rs 11. In the current situation, the price of petrol in the capital is Rs 76.27, which includes 46% tax. The dealer gets petrol at Rs 36.96 per liter. Commissions of Rs 3.62, excise duty 19.48, Delhi 27%, i.e. 16.21 rupees, total tax (excise + VAT) is 35.69 rupees per liter. The price of petrol in this way is Rs 76.27 per liter. If the maximum GST of 28% is on petrol, then 10.34 rupees, 27% VAT in Delhi, ie 13.74 rupees; total tax (GST + VAT) 24.08 rupees. In this situation, the price of gasoline that is available to ordinary people can be Rs 64.66.