Petrol would be Rs 8 cheaper if additional VAT is removed
The price of petrol, which touched Rs90.85 a litre on Friday in the city, could have been Rs8 to 10 less, had the government reduced burden of additional value added tax (VAT), levied from time to time to tide over specific crises. The taxes were never reversed, even after the crisis situation normalized.
The latest addition was of Rs2.12 in May 2020 to deal with Covid. TOI, with the help of Vilas Salpekar, managing committee member of Federation of All Maharashtra Petroleum Dealers’ Association (FAMPEDA), calculated rates of both petrol and diesel in the city.
The calculations show that even as base price of diesel is higher than that of petrol, the latter is costlier due to extra taxes. This is because diesel is no longer subsidized.
It was seen that additional VAT was charged at Rs10.12 a litre in case of petrol and Rs3 for diesel. Additional VAT is the tax that is levied in times of crisis. Sources said even after the crisis has ended the tax has been continued. Had earlier additional VAT been removed, and then only Covid VAT levied, petrol price would still have been cheaper by Rs8.
According to the calculations, base price of petrol that reaches the depot at Nagpur comes to Rs28.03. The additions include freight, excise duty, dealers’ commission, VAT, additional VAT and tax collected at source.
