All About Petrol Tax in Mizoram

mizoram petrol tax — (Source: deccanherald)

Following the line of the Central Government of reducing tax on petrol, out of eight Northeastern states, six states, including Mizoram, decided to reduce VAT on petrol. So if you are curious to learn more about the petrol tax in Mizoram, keep reading.

What Is the Petrol Tax Levied in Mizoram?

The Central Government slashed excise duty on petrol by ₹5 per litre. Similarly, the Mizoram Government welcomed this decision and lowered VAT on petrol by ₹7 per litre.

Take a look at this table mentioned below that illustrates the price-breakup of petrol in Mizoram:

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	₹5.3 per litre
VAT (levied by the State Government)	₹ 13.29 per litre {16.24% of (fuel price charged to dealers + excise duty + avg. dealer commission)}
Retail selling price of petrol at Mizoram	₹ 95.84 per litre

(Note: The above table serves only 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.)

Who Levies Petrol Tax in Mizoram?

The Central Government levies excise duty (₹19.90 per litre) on petrol. At the same time, the State Government of Mizoram imposes VAT (approximately ₹13.29 per litre) on petrol. These tax rates add up to the petrol price of Mizoram, besides other influential factors such as the price of crude oil, dealers' commission etc.

What Are the Factors Affecting Petrol Tax in Mizoram?

Several factors that affect the petrol tax in Mizoram are mentioned below:

1. Commissions of Dealers

Oil Marketing Companies give a commission to petrol pump dealers. This dealer's commission is an essential factor affecting the petrol price in Mizoram.

2. Price of Crude Oil

Changes in the price of crude oil in the international market directly affect the purchasing cost of crude oil in the domestic market space. Alteration in crude oil's price occurs due to higher demand of crude oil in the international market, production rate, and political disturbances in countries from where crude oil is imported directly influence the price of the finished product, petrol.

3. Central's Excise Duty

The Union Government charges excise duty on petrol. This excise duty is an amount of money that is pre-defined by the Centre and does not change with the price of crude oil and fuels.

4. State's VAT/ Sales Tax

Each state government levies VAT on petrol after considering dealers' commissions, excise duty, etc. It changes with respective states and also adds up to the petrol price in Mizoram.

5. Cost for Dealers

Oil Marketing Companies such as IOCL and BPCL levy different price rates to dealers after considering several factors like freight charges, refining expenses, the exchange rate of American dollars etc. This price imposed by Oil Marketing Companies influences the petrol price in Mizoram.

6. Supply and Demand of Petrol

The input cost of crude oil is high, making it difficult for oil refineries to meet the increasing demand for petrol. Thus lower supply and higher demand often raise petrol prices in India. Besides, OMCs often maintain crude oil stock, which may range up to six weeks. This also hampers supply and affects the petrol price.

7. Valuation of Indian Currency Against US Dollars

Oil Marketing Companies import crude oil from foreign countries and pay in dollars, while expenses are incurred in rupees. Therefore, the exchange rate between Indian rupees and dollars plays an influential role in India's petrol price.

Is Petrol Tax Same in All Places of Mizoram?

The answer is yes, as the Mizoram Government imposes an equal rate VAT on petrol in Mizoram. Hence, every state resident pays a uniform tax rate on petrol. However, petrol prices may change across cities, depending on dealers' commissions charged in respective cities.

Reduction of petrol tax in Mizoram reduced the tax burden on petrol borne by residents previously. However, petrol prices keep changing, so it is also essential to keep track of it to avoid confusion later.