HYDERABAD: Upwardly mobile petrol prices finally breached the Rs 100-mark in Telangana on Monday, registering a record Rs 100.20 per litre.
But have you ever wondered how much you are paying as tax on one litre of petrol? Consumers in Telangana pay Rs 58.75 towards taxes alone.
While the state charges Rs 26.45 value-added tax (VAT), the excise duty levied by the Centre on one litre of petrol is Rs 32.30.
In fact, Telangana’s 35.2 per cent VAT on each litre of petrol is second only to Rajasthan and Manipur which levy 36 per cent VAT.
Experts said a high VAT leads to additional cost for consumers each time oil companies effect a change in the base price of petrol.
Earlier, Telangana used to levy 33 per cent VAT on petrol but adjusted it to 35.2 per cent some time back.
“This burns a hole in consumers’ pocket.
Though the Centre’s excise duty is constant, VAT levied by the state goes up each time there is a change in base price forcing the consumes to shell out extra,” an expert pointed out.
Karnataka collects 35 per cent VAT, closely followed by Tamil Nadu at 34 per cent.
Neighbouring Andhra Pradesh, Kerala, Madhya Pradesh, Delhi and Assam are some of the states which levy 30 per cent VAT on petrol.
“Varied petrol rates collected at different places within the state have a lot to do with petroleum dealer commissions and transport charges,” an industry source revealed.
Marri Amarender Reddy, president of Telangana Petrol Dealers’ Association, said solution lies in following a uniform VAT structure across the country.
“Consumers can get some relief if the states follow a single VAT instead of collecting varied percentages.
The Centre should also give clarity on imposing various types of cess on consumers,” he said.
The Centre levies additional excise cess, road development cess and agriculture cess, which also jack up petrol prices.
Industry experts point out that states like West Bengal and Uttar Pradesh follow ad valorem tax (a form of taxation based on the value of a transaction or a property and is generally calculated as a percentage of the value of the property rather than on size, weight or quantity), giving some relief to the consumers.
“Also, ad valorem tax system is followed to safeguard a state’s income in case of any fall in international oil prices,” an expert explained.
Not just petrol, Telangana comes second in the country in taxing the diesel consumers by levying 27 per cent VAT, next only to Odisha’s 28 per cent.
Rajasthan and Chhattisgarh charge 25 per cent VAT on diesel.