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The information in this article was last updated on 21st October 2022.
The recent economic downfall contributed to a cash crunch in the government's cash reserve. However, a rise in fuel prices has helped the government narrow down this financial gap. Currently, the price of petrol in Punjab stands at ₹96.64 per litre. There are several factors which lead to the increase or decrease in cost of petrol in Punjab. One such factor is tax on petrol in Punjab.
Total tax on petrol in Punjab is the sum of the VAT or sales tax and excise duty. Post the Central Government’s call to slash excise duty on petrol, the Punjab State Government also reduced VAT from 27.27% to 15.15% (13.77%+10% surcharge).
The table below shows all the tax components and other parameters involved in the retailing price of petrol.
|
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 |
|
VAT (Levied by the State Government) |
₹19.35 per litre{15.15% of (fuel price charged to dealers + excise duty + avg. dealer commission)} |
|
Retail selling price at Punjab |
₹96.60 per litre |
Central government levies excise duty on petrol. However, the State government imposes sales tax or VAT on petrol in Punjab.
Indian government recently increased the excise duty on petrol to cope with the enormous financial deficit of 9.3% in Gross Domestic Product in 2020-2021 and to meet other state expenses.
Global changes in the price of crude oil impacts petrol and diesel prices in India. Consequently, the cost of these fuels changes in states as well. The price of crude oil depends on its supply and demand, International politics, and future oil reserves and supply.
The commission paid by the oil marketing organisations to petrol pump owners is the dealer's commission. This affects tax on petrol in Punjab.
Sometimes, oil marketing organisations do the work of distributing crude oil. To do this work, these companies charge a specific price to the dealers.
If the rate of buying automobiles increases, the need for petrol and diesel increases. Due to this, the rate of petrol or diesel increases.
The crude oil is sent to refineries for processing into petrol. However, if there are fewer refineries, the supply of petrol decreases. This leads to an increase in petrol prices.
The transaction of crude oil takes place in USD. Thus, any change in the value of a dollar will also affect the value of INR. This will lead to an increase in the product's final price.
Tax on petrol in Punjab is the same for all cities. However, the final price of petrol might vary from place to place, due to additional charges of specific petrol pumps.
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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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