The Central Government's decision to reduce excise duty on petrol evoked similar responses from several states to lower VAT on this fuel. One such state is Tripura. To know more about petrol tax in Tripura, keep reading!
Chief Minister of Tripura, Biplab Kumar Deb, announced a reduction of VAT on petrol by ₹7 per litre, following the Centre's move to reduce excise duty on petrol by ₹5 per litre.
Take a look at this table mentioned below that summarises essential tax rates levied by State and the Central Governments and additional components that make up the petrol price in Tripura:
|
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 |
₹6.75 per litre |
|
VAT (levied by the State Government) |
₹ 14.66 per litre {17.5% of (fuel price charged to dealers + excise duty + avg. dealer commission)} (an additional road development cess of 3% is applicable) |
|
Retail selling price of petrol at Tripura |
₹ 98.66 per litre |
The Central Government imposes excise duty (₹19.90 per litre) on petrol, while the State Government levies VAT or sales tax (approximately ₹14.66 per litre) on petrol. Both these tax rates determine the petrol price in Tripura, besides additional factors like dealers' commissions, the demand for petrol etc.
Following factors are mentioned below that affect the petrol tax in Tripura:
Two and four-wheelers are increasingly plying on Indian roads. This implies a higher demand for petrol in the market. However, the supply of petrol often falls short in the face of increasing demand due to factors like fewer refineries, higher input price of crude oil, etc. Therefore, more demand and less supply of petrol mean higher prices.
Global change in crude oil's price directly affects the purchasing price of petrol in the domestic market. The difference in the price of crude oil is subject to the alteration in its demand and supply, international political relations, future oil reserves and supplies.
As stated above, the Central Government imposes excise duty and each state government levies VAT or sales tax on petrol. Both these tax rates influence the petrol price.
OMCs provide commissions to petrol pump owners, and this adds up to the petrol price in Tripura.
HPCL, IOCL, BPCL levy a price to dealers to distribute crude oil after assessing freight charges, cost of refining etc. This price charged to dealers is an essential component that influences the petrol price in Tripura.
India imports around 86% of crude oil, and the payment to purchase crude oil from the international market is completed in dollars, but expenses incurred are done in rupees. So the valuation of American dollars against Indian rupees is an essential factor in determining petrol price in India. For example, if the valuation of the American dollar increases, it will raise the price of crude oil and petrol at the same time.
Yes, the State Government levies a uniform VAT rate in Tripura. This denotes that every Tripura resident will pay a similar VAT on petrol. However, petrol prices may vary across cities based on the dealers' commission charged.
The excise duty reduction announced in November 2021 is the highest since its increase between March and May 2020. The Union Government requested states to curb VAT on petrol to make its price cheaper. The Tripura Government responded to it and reduced the petrol tax in Tripura, thus lowering the petrol price for 37 lakh of state residents. However, petrol prices fluctuate periodically. Therefore, make sure to keep track of the same.
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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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