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File photo: A man looks at the counter as a vehicles is filled with fuel at a petrol pump in New Delhi, India. (HT_PRINT)
File photo: A man looks at the counter as a vehicles is filled with fuel at a petrol pump in New Delhi, India. (HT_PRINT)

Which states levy highest tax on petrol, diesel in the country?

  • Both central and state governments charge taxes on motor fuels, making up 55 per cent of the retail price for petrol and 50 per cent for diesel rates.

  • With prices of petrol and diesel going up relentlessly since last year, most states have gained on taxes, unless they cut their VATs.

The highest sales tax or VAT on petrol in the country is levied by Madhya Pradesh at 31.55 per litre while the highest tax on diesel is levied by Rajasthan at 21.82 per litre, Oil Minister Hardeep Singh Puri informed Lok Sabha on Monday. The lowest VAT on petrol and diesel is levied by Andaman and Nicobar Islands at 4.82 and 4.74 per litre, respectively.

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Both central and state governments charge taxes on fuels, making up 55 per cent of the retail price for petrol and 50 per cent for diesel rates. The central government charges a fixed excise duty of 32.90 per litre on petrol and 31.80 a litre on diesel. During the financial year that ended on March 31, 2021, central government collected a total excise duty of 1,01,598 crore from petrol and 2,33,296 crore from diesel, the minister informed.

(Also read | Govt's excise collections on petrol, diesel jumps 88% to 3.35 lakh cr in FY21)

States levy differing VAT amounts. on the fuels that result in their per litre taxes going up when prices rise, and coming down when prices fall. Simply put, state governments levy VAT on the total amount of base price and central taxes of the fuels.

With prices of petrol and diesel going up relentlessly since last year, most states have gained on taxes, unless they cut their VATs. Rajasthan saw its VAT revenue rise by 1,800 crore to 15,119 crore in 2020-21 as compared to the previous year. This was followed by Madhya Pradesh that witnessed its revenue grow by 1,188 crore to 11,908 crore. However, Delhi saw its VAT revenue fall by 1,180 crore to 2,653 crore as it had cut levies on diesel.

(Also read | Will OPEC deal halt petrol, diesel price rallies?)

Puri informed that revenue generated by collection of taxes on motor fuels is used for various developmental schemes of the government such as road-building, provide relief to the poor during pandemic and providing free LPG connection, among others.

(With inputs from PTI)

  • First Published Date : 26 Jul 2021, 05:11 PM IST