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Taxes on Petrol and Diesel in India
The Central and state governments levy taxes on fuel. These taxes constitute 55% of the total retailing price of petrol. In the case of diesel, it is 50%.
However, taxes on diesel and petrol vary with each state. It is because states levy different sales taxes or VAT amounts.
If you want to know essential details about tax on petrol and diesel in India state wise, continue reading.
What Is the State Wise Tax on Petrol & Diesel in India?
With the rising fuel prices and increased VAT, few states registered growth in VAT collection. As of July 2021, states like Rajasthan and Madhya Pradesh fall under this category. Andaman and Nicobar Island was the lowest.
The primary difference was in the amount of VAT levied by each government. For example, Madhya Pradesh charges ₹31.55 per litre VAT on petrol, and Rajasthan levies ₹21.82 per litre VAT on diesel. While in Andaman and Nicobar Island, people pay only ₹4.82 per litre on petrol and ₹4.74 per litre on diesel.
Take a look at the table below showcasing the different tax rates on petrol and diesel in major Indian states and union territories -
States | VAT on Diesel | VAT on Diesel |
Madhya Pradesh | ₹3/L VAT + 23% VAT+ +1% cess | ₹4.5/L VAT+ ₹33% VAT +1%cess |
Rajasthan | ₹1750/KL road development cess + 26% VAT | ₹1500/KL road development cess + 36% VAT |
Manipur | 22.50% | 36.50% |
Telangana | 27% | 35.20% |
Assam | 23.66% or ₹17.45/L. VAT minus rebate of ₹5/L is applicable | 32.66% or ₹22.63/L. VAT minus rebate of ₹5/L is applicable. |
Delhi | 16.75% VAT + ₹250/KL air ambience charges | 30% |
Uttar Pradesh | 17.48% or ₹10.41/L | 26.80% or ₹18.74/L |
Andhra Pradesh | ₹4/L VAT + ₹1/L road development cess and VAT + 22.25% VAT | ₹4/L VAT + ₹1/L road development cess and VAT+ 31% VAT |
Bihar | 19% or ₹12.33/L (30% surcharge on VAT as irrecoverable tax) | 26% or ₹16.65/L(30% surcharge on VAT as irrecoverable tax) |
Maharashtra (Thane, Navi Mumbai, Mumbai) | ₹3.00/L additional tax + 24% VAT | ₹10.12/L additional tax + 26% VAT |
Rest of the Maharashtra | ₹3.00/L additional tax + 21% VAT | ₹10.12/L additional tax + 25% VAT |
Andaman and Nicobar Island | ₹4.74/L | ₹4.82/L |
Note: The example of state government tax on petrol in India mentioned below explains the fuel tax structure of Delhi as of May 2021.
Breakdown of Tax Structure on Petrol & Diesel in Delhi
Petrol
Base price | ₹34.19/L |
Freight charges | ₹0.36/L |
Dealer’s charges (excluding the charges of VAT and excise duty) | ₹34.55/L |
Commission of dealers | ₹3.77/L |
Excise duty | ₹32.90/L |
VAT (inclusive of dealer’s commission) | ₹21.36/L |
State levies ₹21.36/L out of the total price of ₹92.58/L on petrol. On the other hand, the Central Government charges ₹32.90/L. The total combined taxes on petrol stands at ₹52.26.
Diesel
Base price | ₹36.2/L |
Freight charges | ₹0.33/L |
Dealer’s charges (excluding the charges of VAT and excise duty) | ₹36.65/L |
Commission of dealers | ₹2.58 |
Excise duty | ₹31.80 |
VAT (inclusive of dealer’s commission) | ₹12.19 |
The central excise tax constitutes ₹31.80, and VAT is ₹12.19 on the base price of diesel. This comprises the retail cost of ₹83.22.
The tax rates on petrol and diesel keep changing. One such factor for higher VAT and excise duty is to meet higher expenses due to the current global health crisis. Therefore, keep yourself updated with the tax on petrol and diesel in India state wise. This will help you to avoid any confusion later.
