Petrol Tax in Gujarat: Different Types of Taxes Applicable on Petrol

The information in this article was last updated on 21st October 2022.

The current economic disbalance had forced the Government to increase the fuel prices in India. However, the prices were recently dropped to relieve the citizens.

Individuals should know that the petrol prices in different states are various subject factors. For instance, the petrol tax in Gujarat impacts the petrol price in the state.

Keep reading to understand how this factor impacts the tax on petrol in Gujarat.

How Much Is the Petrol Tax in Gujarat?

The petrol price in Gujarat depends on the daily dynamic fuel pricing. The factors like sales tax or VAT (Value Added Tax) and excise duty form this price. According to a report, the Centre has reduced the excise duty on petrol by ₹5 per litre. This decision has led to a reduction of VAT on petrol in Gujarat by ₹7 per litre.

Several factors contribute to the petrol price in Gujarat. Factors like current petrol VAT rate in Gujarat, retail selling price, dealers commission, excise duty etc. all add up to the cost of petrol as shown in the following table.

Elements	Effective as of 21st October (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	₹3.89 per litre
VAT (Levied by the State Government)	₹15.79 per litre {19.46% of (fuel price charged to dealers + excise duty + avg. dealer commission)}
Retail selling price at Gujarat	₹96.93 per litre

(Note: The above table serves as an example to explain the petrol tax breakup, with data taken from reliable and authorised sources, as of 21st October 2022. The actual prices, however, may vary as fuel price, dealer’s commission, cess and other such aspects change periodically. Check the latest petrol prices in Gujarat)

Let’s check who controls the petrol tax rate in Gujrat to understand the concept better.

Who Levies Petrol Tax in Gujarat?

The state government decides the petrol VAT in Gujarat while the Central Government sets the excise duty.

Hence, petrol and diesel prices in Gujarat are controlled by both Central and State Governments.

What Are the Factors Affecting Petrol Tax in Gujarat?

These are some factors that affect tax of petrol in Gujarat.

Price of Crude Oil

As discussed earlier, crude oil prices impact petrol prices significantly. This price fluctuates with market conditions, demand and supply of oil, oil reserves, international politics, etc.

To have a clear idea of Gujarat's petrol tax, individuals should note the latest crude oil price.

Cost for Dealers

OMC or Oil Marketing Companies charge a specific charge from dealers. This factor again impacts petrol prices in Gujarat and other states. Refining and freight charges also impact petrol tax in Gujarat.

Dealer’s Commission

Oil Marketing Companies extend a commission to fuel dealers. This is a part of their earnings which impacts petrol price in Gujarat.

Central Excise Duty

Excise duty is fixed by Central Government on Indian fuels. This amount doesn’t fluctuate with fuel prices even when crude oil price rises.

State’s Sales Tax

This sales tax or VAT depends on factors such as dealer’s commission, excise duty, crude oil price, etc.

Demand and Supply of Fuel

The demand for petrol and lack of supply increases petrol prices and vice versa. This factor impacts petrol prices and petrol tax levied in India.

Value of Indian Rupees Against US Dollars

Transaction of crude oil takes place in US Dollars. A slight change in Dollar’s value impacts the Indian Rupee. An increase in Dollar’s value will lead to a rise in purchasing price.

These are some essential data on petrol tax in Gujarat and other related factors. Individuals should know how to calculate charges levied under petrol tax to understand the tax breakage better.