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The Meghalaya Government reduced VAT on petrol following the Central Government's decision to slash excise duty on petrol to relieve citizens from rising petrol prices. This article further highlights vital aspects of the petrol tax in Meghalaya. If you are interested to know more about it, keep reading!
The Central Government reduced excise duty on petrol by ₹5 per litre. Following this decision, the Meghalaya Government lowered VAT on petrol to 13.5% from 20% per litre. This amounts to a reduction of around ₹5.20 per litre.
Here is this table mentioned below that illustrates price-breakup of the petrol in Meghalaya:
|
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 |
₹7.69 per litre |
|
VAT (levied by the State Government) |
₹ 11.47 per litre {13.5% of (fuel price charged to dealers + excise duty + avg. dealer commission)} (an additional pollution surcharge of ₹ 0.10 on VAT) |
|
Retail selling price of petrol at Meghalaya |
₹ 96.41 per litre |
The Central Government levies excise duty (₹ 19.90 per litre) on petrol. On the other hand, the Meghalaya Government imposes VAT (approximately ₹ 11.47 per litre) on petrol in Meghalaya. These tax rates influence the petrol price in Meghalaya apart from additional factors like dealer's commission, demand and supply of petrol etc.
Factors that influence petrol tax in Meghalaya are as follows:
The price of crude oil changes globally due to its demand and supply, future oil reserves, and international political relations. Hence, any change in crude oil's price directly affects petrol prices in India.
The Central Government levies excise duty on petrol. This is a pre-defined amount and is not subject to alterations, unlike VAT. It is an essential factor that affects the petrol price. When the Central Government increases tax on petrol, OMCs also raise petrol price to maintain profit margin and retrieve losses in the oil business.
As mentioned above, each state government levies VAT on petrol after factoring in excise duty charged, dealers' commissions etc. This component also constitutes the petrol price.
Oil Marketing Companies give commissions to petrol pump owners, covering their income, profit and expenses. This commission also influences the petrol price in Meghalaya and across India.
Oil Marketing Companies charge a price to dealers to distribute crude oil after considering freight charges, expenses associated with refining crude oil etc. This price determines the purchasing cost of petrol.
Crude oil is purchased from the international market, and the transaction is completed in dollars. Thus, the exchange rate between Indian rupees and American dollars is essential in determining the petrol price. For instance, if there is an appreciation in the valuation of American dollars against Indian currency, it will increase the purchasing price of crude oil and petrol.
Demand and supply of petrol impact the petrol price in India. This means that if the supply is less than the demand for petrol, it will increase its price and vice versa.
Yes, the Meghalaya Government imposes a uniform VAT rate on petrol in Meghalaya. However, the price of petrol may vary across cities of Meghalaya, depending on the commission charged by dealers.
This is all about the petrol tax in Meghalaya. Remember to keep track of the latest updates on petrol tax and price as they change periodically.
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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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