All About Petrol Tax in Nagaland

The Central Government’s move to reduce excise duty on petrol had evoked several states of India to lower VAT rates on petrol. One such state is Nagaland.

If you are curious to know more information about petrol tax in Nagaland, keep reading!

What Is the Petrol Tax Levied in Nagaland?

The Nagaland Government reduced VAT on petrol by ₹7 per litre, following a similar line of the Central Government to reduce excise duty on petrol by ₹5 per litre, thereby reducing petrol price by ₹12 per litre in the state.

The table mentioned below further breaks down the price of petrol in Nagaland:

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	₹4.9 per litre
VAT (levied by the State Government)	₹16.13 per litre {19.65% of (fuel price charged to dealers + excise duty + avg. dealer commission)} (an additional 5% surcharge and road maintenance cess of ₹2 per litre are applicable)
Retail selling price of petrol at Nagaland	₹98.28 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 Nagaland?

The Central Government imposes excise duty (₹19.90 per litre) on petrol, while the State Government levies VAT or sales tax (approximately ₹16.13 per litre) on petrol in Nagaland. These tax rates are essential components in determining petrol price in Nagaland, other than additional factors such as dealers’ commission, price of crude oil, demand and supply of petrol etc.

What Are the Factors Affecting Petrol Tax in Nagaland?

Factors that influence the petrol tax in Nagaland are stated below:

1. Demand and Supply of Petrol

Lower supply of petrol due to fewer refineries available in the country and additional factors often fail to meet the increasing demand for petrol. This raises petrol prices in India.

2. Excise Duty and Sales Tax

The Central Government levies excise duty on petrol, which is not a percentage but a fixed amount. Hence, it does not change irrespective of varying fuel and crude oil prices.

Every state government imposes VAT on petrol after assessing dealers’ commissions, excise duty etc. Hence it varies with respective states. These tax rates also add up to the petrol price of Nagaland.

3. Dealers’ Commissions

Oil Marketing Companies give a commission to petrol pump owners, which includes their income, profit, and expenses. This commission is also a vital factor that determines the petrol price in Nagaland and other states.

4. Valuation of Indian Rupees Against US Dollars

Crude oil, which is processed into petrol, is imported from other countries, and the price is paid in dollars. Thus, any change in the valuation of US dollars against Indian rupees directly influences the purchasing cost of crude oil and, consequently, petrol.

5. Cost for Dealers

Oil Marketing Companies distribute crude oil and levies a price to dealers, and this price is also a determining factor of the petrol price.

6. Price of Crude Oil

Factors that affect crude oil’s price include its demand and supply, international political relations, future oil reserves, and supplies. All these factors influence crude oil’s price, which directly affects the petrol price in the domestic market.

Is Petrol Tax Same in All Places of Nagaland?

Yes, the Nagaland Government charges an equal rate of VAT on petrol in Nagaland. However, petrol prices may change with each city due to the different commission ranges charged by dealers.

This brings an end to crucial aspects of petrol tax in Nagaland. Besides, petrol prices may vary in Nagaland in future. Hence, keep an eye on the same.

Frequently Asked Questions

✓ Did the State Government lower VAT on petrol in Nagaland in February before reducing it in November 2021?

Yes, the Nagaland Government reduced VAT on petrol to 25% per litre from 29.80% per litre in February, before lowering it in November 2021.

✓ How much excise duty did the Central Government charge before deducting it in November 2021?

Earlier, the Central Government used to levy excise duty of ₹32.9 per litre of petrol before reducing it in November 2021.