As per reports, the Maharashtra Government is considering a marginal reduction in the Value Added Tax (VAT) levied on petrol and diesel in the state. This comes as the Central Government is yet to provide any concessions on excise duty. Fuel prices in Mumbai have touched ₹97.57 per litre whereas diesel prices have reached ₹86.60 per litre as of recent figures.
Maharashtra Deputy CM and Finance Minister, Ajit Pawar recently spoke about providing some form of relief for the rising fuel prices. If successfully implemented, this could turn out to be a masterstroke by the State Government with political experts suggesting that this concession will be remembered by the citizens/voters.
Read - Fuel Prices Hiked Again After A 2-Day Pause
However, the move will also have financial implications on the state exchequer since Maharashtra earns more than ₹25,000 crores per year on VAT applied to fuel. This means that even a hike of ₹1 in fuel prices provides the state ₹275 crores and ₹140 crores for diesel and petrol respectively.
As per experts quoted by TOI, around 60 per cent of the price paid for diesel and 66 per cent of the price paid for petrol goes towards state and central taxes.
Also read - Shiv Sena To Conduct Statewide Protests Over Fuel Prices
This is despite the fact that the base price of petrol has fallen by ₹33.57 per litre over a seven-year period due to a fall in global crude prices, fuel pricing expert Kedar Chandak said.
“When you are purchasing petrol at the pump for ₹97.57 per litre today, you are paying ₹33.59 for the fuel and the rest as taxes. Similarly, the basic price of diesel for every litre is ₹35.26 today when you actually pay ₹88.6 at the pump, which includes taxes,” he said.
Read - Base Fares Of Auto, Taxi In Mumbai Hiked By INR 3 Amid The Increase In Fuel Rates
Share
Tweet
