Delhi Govt Increases VAT On Petrol & Diesel; Prices Hiked By ₹1.67 & ₹7.10

Delhi Govt Increases VAT On Petrol & Diesel; Prices Hiked By ₹1.67 & ₹7.10

The average cost of a litre of the fuel at United Kingdom forecourts is £1.08, according to Government data.

The increased tax on the prices of petrol and diesel will boost the Delhi government's revenue, which has taken a serious hit due to the lockdown enforced to combat the spread of COVID-19.

Retail prices of petrol and diesel will not be impacted by the tax changes as state-owned oil firms will adjust them against the recent fall in oil prices, according to reports. "In coming days, nearly all state governments are expected to raise taxes on auto fuels and liquor", said a tax expert who did not want to be named.

It has also raised special additional excise duty on petrol by Rs 2 per litre and diesel by Rs 5 per litre.

The excise tax on petrol was Rs 9.48 per litre when the Modi government took office in 2014 and that on diesel was Rs 3.56 a litre.

While the hike in Value-Added Tax saw a rise in fuel prices in Delhi on Monday, the increase in excise duties has not affected retail prices as the government had not passed on the benefit of low crude prices to consumers this year.

In a press note, the government said it has increased excise duties by Rs 10 per litre on petrol and Rs 13 per litre on diesel. States will get only ₹0.84 per litre in case of petrol and ₹2.1 in case of diesel.

Roughly, every rupee hike in excise duty is expected to yield Rs 13,000-14,000 crore annually. However, the notification clarified that the retail price of fuels won't rise to avoid hurting the consumer.

Since the beginning of this year, worldwide crude prices have crashed by around 57 per cent from $66.25 per barrel to $28.5 per barrel. AdvertisementFuels like petrol and diesel do not come under the harmonised goods and services tax (GST) in India and therefore both the states and the Centre are free to increase or decrease levies.

With the latest hike, the price of petrol in Delhi now stands at Rs. 71.26 a liter, up from Rs. 69.59 per liter while diesel has climbed to Rs. 69.39 a liter from Rs. 62.29.

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