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After the Central Government deducted excise duty on petrol by ₹ 5 per litre, the Chandigarh Administration also lowered VAT by ₹ 7 per litre on petrol, thus reducing the higher fuel price in this Union Territory.
If you are interested to know more about petrol tax in Chandigarh, keep reading!
According to the Department of Excise and Taxation, UT Chandigarh, the Chandigarh Administration slashed VAT on petrol to 15.24% or ₹ 7 per litre.
Take a look at the table mentioned below that highlights the essential tax and additional components that make up the petrol price in Chandigarh:
|
Elements |
Effective as of 21st October 2022 (in ₹ per litre) |
|
Price charged to dealers |
₹ 57.35 per litre |
|
Excise duty (levied by the Central Government) |
₹ 19.90 per litre |
|
Average dealer commission |
₹6.22 per litre |
|
VAT (levied by the State Government) |
₹ 12.73 per litre {15.24% of (fuel price charged to dealers + excise duty + avg. dealer commission)} (an additional cess of ₹ 0.01 per litre is applicable) |
|
Retail selling price of petrol at Chandigarh |
₹ 96.20 per litre |
The Central Government charges excise duty (₹ 19.90 per litre) on petrol, while the Chandigarh Administration levies VAT (approximately ₹ 12.73 per litre) on petrol. These tax rates charged on petrol constitute its price in the UT, along with other factors such as dealers' commissions, price of crude oil etc. Approximately two-thirds of the petrol price comprises the tax rates charged by State and Central Governments.
Factors that determine the petrol tax in Chandigarh are mentioned below:
It often becomes difficult for oil refinery companies to meet the increasing demand for petrol due to higher input costs, leading to less petrol available in the market. Thus, higher demand and lower supply raise the petrol price. Moreover, OMCs often maintain a stock of crude oil for up to six weeks, which also lowers the supply of petrol in the face of its increasing demand, thus impacting petrol prices in India.
Oil Marketing Companies provide a commission to petrol pump owners, covering their income, expenses, and profit. This commission charged by dealers affects the petrol price in Chandigarh.
Oil Marketing Companies levy a charge to dealers to distribute crude oil after considering refining cost, freight charges etc. This price charged to dealers is essential in determining the petrol price in Chandigarh.
Crude oil is refined into petrol and is imported from the international market. Hence, any change in the price of crude oil due to variation in its demand and supply, international political relations, oil reserves and supplies directly affect petrol price in India.
Each state government levies VAT or sales tax on petrol, and it varies from one state to another. The Central Government charges excise duty on petrol, which is not a percentage but an amount of money. Hence, it remains fixed irrespective of changing fuel and crude oil prices.
The tax imposed by the Central Government rose by three times from ₹ 9.48 per litre (FY 2014) to ₹ 27.90 per litre (FY 2021).
These tax rates influence the petrol price in Chandigarh.
As mentioned above, crude oil is purchased from foreign countries; hence, the transaction is completed in dollars. Therefore, the valuation of Indian rupees against American dollars impacts the purchasing price of crude oil, directly affecting the petrol price in the domestic market.
Yes, the Chandigarh Administration imposes an equal rate of VAT on petrol in Chandigarh. Thus, residents of the UT shall pay a uniform tax rate on petrol.
Bearing a clear knowledge about the petrol tax in Chandigarh and additional crucial aspects will encourage residents to learn about the components that make up the petrol price they are paying.
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Disclaimer: This information is added only for informative purposes and collected from different sources across the Internet. Digit Insurance is not promoting or recommending anything here. Please verify the information before making any decisions.
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