All About Petrol Tax in Jharkhand
Amid the rising petrol prices, The Central Government reduced excise duty on petrol by ₹5 per litre, to relieve Indian citizens from it. It also requested other states to lower VAT rates on petrol. Jharkhand, however, is one such state that refused to lower its VAT rate on petrol.
If you are interested to know more about petrol tax in Jharkhand, keep scrolling!
What Is the Petrol Tax Levied in Jharkhand?
Currently, the State Government of Jharkhand is continuing with 22% of the VAT on petrol, which has remained unchanged since 2016. The Finance Minister of Jharkhand, Rameshwar Oraon, justified this act of state by stating that the petrol prices are comparatively lower than its neighbouring states.
Take a look at this table mentioned below that highlights the tax rates charged by State and Central Governments and additional components that are involved in making the petrol price in Jharkhand:
| Elements | Effective as of 21st October 2022 (in ₹ per litre) |
|---|---|
| Price charged to dealers | ₹ 57.35 per litre |
| Excise duty (levied by the Central Government) | ₹ 19.90 per litre |
| Average dealer commission | ₹ 5.06 per litre |
| VAT (levied by the State Government) | ₹ 18.12 per litre {22% of (fuel price charged to dealers + excise duty + avg. dealer commission)} (an additional cess of ₹1 per litre is applicable on petrol price) |
| Retail selling price of petrol at Jharkhand | ₹ 100.43 per litre |
(Note: The above table serves only as an example to explain the petrol tax breakup, with data taken from reliable and authorised sources as of 21st October 2022. The actual prices, however, may vary as fuel price, dealer’s commission, cess and other such aspects change periodically.)
Who Levies Petrol Tax in Jharkhand?
The Central Government imposes excise duty (₹19.90 per litre) on petrol, while the Jharkhand Government levies VAT (approximately ₹18.12 per litre). These tax rates influence the price of petrol in the state apart from additional determinants like the price of crude oil, dealers’ commissions etc.
What Are the Factors Affecting Petrol Tax in Jharkhand?
1. Price of Crude Oil
Crude oil is imported from other countries, and a change in its price directly affects the petrol price in India. Usually, the demand and supply of crude oil, oil reserves and their supplies, and international political relations are a few factors that influence the price of crude oil.
2. Demand and Supply of Petrol
Demand and supply of petrol also impact the petrol price in Jharkhand. Fewer refineries and higher input price of crude oil are some of the reasons which often leads to a lower supply of petrol and fails to meet its higher demand. Thus, as per the laws of economics, petrol price increases in the market.
3. Dealers’ Commissions
Oil Marketing Companies provide a commission to petrol pump owners. This commission charged by fuel dealers determines the petrol price in Jharkhand.
4. Cost for Dealers
Oil Marketing Companies purchase and distribute crude oil, and based on the refining cost, freight charges, they charge a price to dealers. This price charged to dealers is an essential component in determining the petrol price in Jharkhand.
5. Excise Duty and Sales Tax
The Central Government imposes excise duty on petrol while each state government levies VAT or sales tax on petrol after considering excise duty, dealers’ commissions etc. These tax rates charged by State and Central Governments play a vital role in influencing petrol prices.
6. Valuation of Indian Currency Against US Dollars
The valuation of Indian rupees against US dollars impacts the petrol price in India as crude oil is purchased from the international market and is paid in dollars.
Is Petrol Tax Same in All Places of Jharkhand?
Yes, the State Government levies an equal rate of VAT on petrol in Jharkhand. Hence, every resident pays a uniform VAT rate on petrol across the state. However, petrol prices may differ in each city of Jharkhand, given the differences in commission charged by dealers.
This is all about petrol tax in Jharkhand. However, tax rates and prices of petrol may vary over the period. Therefore, it is essential to remain informed about the same.
Frequently Asked Questions
Did the Jharkhand Government announce a reduction in petrol prices for two-wheeler owners?
Yes, the Chief Minister of Jharkhand announced a reduction of petrol and diesel prices by ₹25 per litre. This is available only for poor owners of two-wheelers, and the state will provide this concession for up to 10 litres of petrol each month.
Is VAT on petrol in Jharkhand inclusive of GST?
No, petrol does not fall under the ambit of the GST regime, and the responsibility of imposing VAT on petrol falls under the Jharkhand Government.