Petrol and diesel prices were reduced in the country from November 3. First of all, the central government reduced 5 and 10 rupees on petrol and diesel. After which 12 BJP-administered states decided to reduce VAT. After which 22 states cut VAT on 6 November. However, some states did not support VAT deduction. Those states say that some decisions of the central government cause damage to the state treasury reserves. However, now politics has started regarding reducing VAT, so let us tell you about the tax chronology on petrol and diesel.
excise duty and vat game
First of all, the central government reduced the excise duty. Under which petrol was reduced by Rs 5 and diesel by Rs 10 per liter. After that 10 states ruled by BJP, 6 states in alliance with BJP, and only Odisha ruled by non BJP reduced VAT on petrol diesel from Rs 2 to Rs 12 from their share. Take Delhi for example. Arvind Kejriwal’s government is in Delhi. So far no decision has been taken to cut VAT here. At present, the price of petrol in Delhi is Rs 103.97 per liter while the price of diesel is Rs 86.67 per liter. Petrol in Delhi was reduced by Rs 6.07 a liter and diesel by Rs 11.75 a liter after the central government reduced the excise duty.
Also read: After the central government, now 22 states cut VAT, diesel-petrol became cheaper than before
Understand the game of VAT and Excise Duty with an example
We all know that the central government has reduced the excise duty by Rs 5 and Rs 10, then how has the price of petrol in Delhi become cheaper by Rs 6.07 and diesel by Rs 11.75 a liter? We will give you the answer of this question. VAT is levied by the state government and VAT is always levied on the base price plus excise duty. Before the price reduction, the excise duty in Delhi was Rs 32. After reducing by Rs 5, she became Rs 27. Now the state government’s VAT has also reduced as VAT is levied on the base price and excise duty. Therefore, even if the government has reduced from Rs 5 to Rs 10, but it also affects VAT.
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