Union Minister and senior BJP leader Nitin
Gadkari is known for his pragmatism as much as much as he is loved for his
project execution skills. That is why jaws dropped collectively when he made a
case for not reducing taxes on petroleum products on the specious ground that
it would ground several of the welfare and infrastructure projects of the
government. But his colleague, the one who is closer to ground zero, Union Oil
Minister Dharmendra
Pradhan has not been mincing words. He has
been an ardent votary of petroleum products being brought under the Goods and
Services Tax (GST) which in his perception would bring down the oil prices to
half. Another person equally closer to ground zero, Maharashtra Chief Minister Devendra
Fadnavis too has come out openly in support of
fuel being brought under the GST so as to provide a lasting solution to the
vexed problem of climbing fuel prices for consumers.
Break-up of
petrol prices in Delhi
|
|||
Elements
|
Unit
|
Before GST
|
After GST
|
Cost &
freight price on moving average basis of crude oil
|
$/barrel
|
86.61
|
86.61
|
Average
exchange rate
|
Rs/$
|
67.51
|
67.51
|
Price charged
to dealers (Excluding excise & VAT)
|
Rs/Litre
|
37.89
|
37.89
|
Add: Excise
duty
|
Rs/Litre
|
19.48
|
0
|
Add: Dealer
commission (average)
|
Rs/Litre
|
3.63
|
3.63
|
Total
|
61.00
|
41.52
|
|
Add: VAT
applicable for Delhi @27%
|
Rs/Litre
|
16.47
|
0
|
Add: GST at
peak rate of 28% (assumption)
|
0.00
|
11.63
|
|
Retail selling
price in Delhi
|
Rs/Litre
|
77.47
|
53.15
|
Let us
see how GST works assuming the peak rate of 28 percent is what mollifies the
Opposition besides suiting the central government. At present the Delhi government
imposes 27 percent VAT on petrol. The selling price to dealers is Rs 37.89. To
this, when excise of Rs 19.48 is added besides dealer commission of Rs 3.63, it
makes the petrol bunk price Rs 61 per litre. The 27 percent VAT on this results
in a final price of Rs 77.47 per litre to consumers.
Break-up of
petrol prices in Mumbai
|
|||
Elements
|
Unit
|
Before GST
|
After GST
|
Cost &
freight price on moving average basis of crude oil
|
$/barrel
|
86.61
|
86.61
|
Average
exchange rate
|
Rs/$
|
67.51
|
67.51
|
Price charged
to dealers (Excluding excise & VAT)
|
Rs/Litre
|
37.89
|
37.89
|
Add: Excise
duty
|
Rs/Litre
|
19.48
|
|
Add: Dealer
commission (average)
|
Rs/Litre
|
3.63
|
3.63
|
Total
|
61.00
|
41.52
|
|
Add: VAT
applicable for Mumbai @ 39.78%
|
Rs/Litre
|
24.27
|
|
Add: GST at
peak rate of 28% (assumption)
|
0.00
|
11.63
|
|
Retail selling
price in Mumbai
|
Rs/Litre
|
85.27
|
53.15
|
Dealer price remains the same at Rs 37.89. Add the same dealer commission of Rs 3.63. The petrol bunk price before GST would be Rs 41.52. On this GST of 28 percent would lead to a tax revenue of Rs 11.63, thus making for an affordable consumer price of Rs 53.15.
Post Tags:- Petrol Under GST, Diesel Under GST, GST