Petrol and diesel prices have been on fire since last month. Although governments are calling for higher crude oil prices in the international market, the reality is that the price of petrol, which is Rs 29.34 per litre, has crossed Rs 88. As far as diesel is concerned, its base price in Delhi on February 1 was only Rs 30.55 per litre, while on this day it was selling at Rs 76.48 per litre in the market.
In fact, in India, where the central government levies excise duty of more than Rs 32 per liter on diesel and petrol, the state governments are filling their coffers from the pockets of the people by imposing VAT and cess. In addition, freight and dealer commissions are added to both the oils, which are collected from the general public. If we talk about the tax levied on petrol and diesel by the state governments, the VAT on petrol in Rajasthan is 36 per cent and on diesel 26 per cent. Earlier, it had the highest VAT.
Now Manipur is at the forefront in terms of VAT collection. It is levying 36.50 per cent tax on petrol and 22.50 per cent on diesel. In the larger states, Tamil Nadu levies a tax of 15 per cent on petrol and 11 per cent on diesel, but VAT also levies a cess of Rs 13.02 per liter on petrol and Rs 9.62 per liter on diesel. Most states are levying cess. Lakshadweep is the only state where VAT is not levied.
The central government earned Rs 3.34 lakh crore in 2019-20 by imposing excise duty on petroleum products. When the Modi government was first formed in May 2014, the revenue from excise duty in 2014-15 was Rs 1.72 lakh crore, which has doubled in just five years.