Petrol Prices in Jammu yesterday and today remained at Rs. 90.62 paise per litre after reduction of just 20 paise on 24th March this year. Diesel prices fluctuate between 81.90 paise to 82.22 within the state.
Nowadays, Petrol and Diesel prices are updated daily under what they call the ‘Dynamic Fuel Pricing’ method. Like other places, the new petrol rate in Jammu and Kashmir is updated daily at 6:00 am IST.
If you get to know how petrol prices are calculated in various states as also how it compares to Jammu and Kashmir, you will feel a bit consolations despite the fuel prices are drilling a big hole in your pocket. State levies and central excise duty account for more than half of the retail selling prices of petrol and diesel and these vary from state to state.
For instance, taxes make up for over 50 per cent of the present retail price of petrol of Rs 90.61 a litre in Jammu. Excise duty constitutes 27.36% and VAT @ 17.02% besides Road Cess, Pollution Cess with surcharges and Dealer’s margin on the retail price per litre of Fuel we purchase from the retail outlet.
Amidst much hue and cry over high taxes on motor fuel, Finance Minister Nirmala Sitharaman on Tuesday said she would be “glad” to discuss the suggestion of bringing petrol and diesel under the ambit of the Goods and Services Tax at the next meeting of the GST council if the states take initiative on the issue.
Replying to the debate on Finance Bill 2021 in the Lok Sabha, Sitharaman said both the centre as well as state governments levy taxes on petrol and diesel. However, the Centre shares its collection on the fuel with states.
She said, in the next GST Council (meeting), if that discussion comes up, she will be glad to have it on the agenda and discuss it. The Centre has no issues. Let the states come and discuss it. The call has to be taken there (at the Council), The GST Council, headed by Union Finance Minister and comprising state finance ministers, is the highest decision-making body regarding GST.
Petrol and diesel prices are hovering at historic highs following a relentless increase in rates over the past nine months. There have been calls by Opposition parties as well as sections of society to reduce excise duty to ease consumer pain.
The Union government’s tax collections on petrol and diesel have jumped over 300 per cent in the last six years as excise duty on the two fuels was hiked; the Lok Sabha was informed on Monday.
As per information furnished by Minister of State for Finance Anurag Singh Thakur in a written reply to a question in the Lok Sabha, the government collected Rs 29,279 crore from excise duty on petrol and Rs 42,881 crore on diesel in 2014-15 — the first year of office of the Modi government.
The collections on petrol and diesel rose to Rs 2.94 lakh crore in the first 10 months of the current fiscal (2020-21), he said and added that together with excise duty on natural gas, the Central government in 2014-15 collected Rs 74,158 crore which has gone up to Rs 2.95 lakh crore from April 2020 to January 2021 period.
The Minister said taxes collected on petrol, diesel and natural gas as a percentage of total revenue has gone up from 5.4 per cent in 2014-15 to 12.2 per cent this fiscal.
Excise duty on petrol has been raised from Rs 9.48 per litre in 2014 to Rs 32.90 a litre now while the same on diesel has gone up from Rs 3.56 a litre to Rs 31.80.
“The total central excise duty (including basic excise duty, cesses and surcharge) was increased by Rs 3 per litre on petrol and diesel with effect from March 14, 2020. It was further revised upwards by Rs 10 per litre on petrol and Rs 13 per litre on diesel with effect from May 6, 2020,” Thakur said.
These increases took away the gain that would have accrued to consumers from a sharp drop in international oil prices. Taxes make up almost 60 per cent of the present retail price of petrol. Excise duty makes up for 36 per cent of the retail price. It is time to reduce taxes to ease the burden of the common public.
If we take an example of national capital Delhi, the excise component in the prices of petrol is close to Rs 38 per litre while state value-added tax (VAT) is about Rs 19 per litre that is too high and even further high elsewhere in the country.
Despite such a grave situation available in the country, neither the Central Government has slashed the Excise duty, nor the state governments are ready to reduce the VAT rates on Petrol and Diesel. The reasons for the reluctance of both union and state governments to bring Petrol and Deisel under the ambit of single tax GST is the huge gap between the highest slab of GST which is 28% and Excise tax and VAT took together. Thus the Centre should take a lead in bringing the consensus among the states to bring the fuel prices under GST to provide a sigh of relief to the people.
It is thus urged the government to bring down prices of petrol, diesel and LPG cylinder.
