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The Government of Himachal Pradesh reduced VAT on petrol after the Central Government announced a reduction in excise duty on petrol by ₹5 per litre. Want to know more about petrol tax in Himachal Pradesh? If yes, keep scrolling!
The State Government of Himachal Pradesh lowered VAT on petrol by ₹2 per litre. This decreased the VAT on petrol to 17.5%.
This further reduced the petrol price by ₹12 per litre.
Take a look at the table mentioned below that illustrates the price-breakup of petrol in Himachal Pradesh:
|
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 |
₹4.23 per litre |
|
VAT (levied by the State Government) |
₹14.26 per litre {17.5% of (fuel price charged to dealers + excise duty + avg. dealer commission)} |
|
Retail selling price of petrol at Himachal Pradesh |
₹95.74 per litre |
The Central Government levies an excise duty (₹19.90 per litre) on petrol, while the State Government charges (₹14.26 per litre) on petrol in Himachal Pradesh. These tax rates altogether determine the petrol price in Himachal Pradesh, along with other factors such as commissions charged to dealers, price of crude oil etc.
Factors that play an influential role in determining petrol tax in HP are as follows:
Alteration in crude oil's price occurs due to its demand and supply, international political relations and oil reserves and supplies and any change in its price affects the petrol price in Himachal Pradesh and India.
Each state government in India charges VAT, and the Central Government levies excise duty on petrol. These tax rates influence the petrol price in Himachal Pradesh.
Oil Marketing Companies provide a commission to petrol pump owners, and this price also determines the petrol price in Himachal Pradesh.
Oil Marketing Companies levies a price to dealers to distribute crude oil after considering expenses of refining crude oil, freight charges etc. This price component affects the petrol price.
Higher demand and lower supply can raise petrol prices in Himachal Pradesh and across the country. Besides, the availability of refineries also impacts the demand and supply of petrol which further affect its price.
The exchange rate between rupees and American dollars is crucial in determining petrol prices in India as the transaction for purchasing crude oil from the international market is completed in dollars.
Yes, the Himachal Pradesh Government imposes a uniform VAT on petrol in Himachal Pradesh. However, the price of petrol may vary across cities given the differences in dealers' commissions.
The total tax incidence on petrol was slashed by 50% after reducing excise duty, while the percentage is comparatively higher for states that reduced VAT on petrol. Himachal Pradesh is one such state. However, the petrol tax in Himachal Pradesh may vary in the future, following a change in factors mentioned above, consequently impacting its price.
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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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