All About Petrol Tax in Kolkata
The Central Government lowered excise duty on petrol by ₹ 5 per litre and requested other states reduce the same to relieve Indian motorists from rising fuel prices. However, the West Bengal Government did not change VAT charges on petrol as it would affect the state exchequer. There are other vital aspects of the petrol tax in Kolkata discussed in this upcoming segment, so keep reading!
What Is the Petrol Tax Levied in Kolkata?
As mentioned above, VAT on petrol in West Bengal remained unchanged, and it continues to levy approximately ₹ 19.27 per litre of petrol. This is because a significant proportion of a state’s revenue, around ₹ 8,000 crores (as of July 2021), comes from VAT on petroleum products.
Moreover, the reduced excise duty has already lowered petrol prices across the state by ₹ 5.82 per litre. This may provide relief to residents of Bengal; however, it will negatively affect the state exchequer.
Here is this table mentioned below that summarises tax breakup in Kolkata and sums up the petrol price in the city:
| 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 | ₹ 8.3 per litre |
| VAT (levied by the State Government) | ₹ 20.77 per litre {24.21% of (fuel price charged to dealers + excise duty + avg. dealer commission)} |
| Retail selling price of petrol at Kolkata | ₹ 106.03 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 Kolkata?
Both State and Central Governments levy taxes on petrol. The State Government of West Bengal imposes VAT (₹ 20.67 per litre), and the Union Government charges excise duty (₹ 19.90 per litre) on petrol.
What Are the Factors Affecting Petrol Tax in Kolkata?
Take a look at some of the factors mentioned below that influence petrol tax in Kolkata:
1. Price for Crude Oil
International politics, future oil reserves and their supply and supply and demand of crude oil affect its price. So, a change in the price of crude oil directly determines the petrol prices.
2. Cost for Dealers
The responsibility of distributing crude oil is on Oil Marketing Companies, and they charge a price to dealers, which affects the petrol price.
3. Sales Tax and Excise Duty
Sales tax on petrol varies with each state as respective Governments of states determine sales tax or VAT on petrol after considering dealers’ commission excise duty, etc.
Excise duty is levied by the Central Government and is a pre-defined amount of money. Hence, it does not vary with fluctuating petrol prices.
4. Dealer’s Commission
Petrol pump owners receive a commission from Oil Marketing Companies, which is a crucial determinant of petrol price.
5. Valuation of Indian Rupees Against US Dollars
Crude oil is purchased from the international market, and the transaction is concluded in dollars. Hence, any alteration of the valuation of US dollars against Indian rupees affects the price of crude oil and petrol.
6. Availability of Refineries
Fewer refineries to process crude oil into petrol can affect the supply of the same, and as per the law of economics, lower supply and higher demands of petrol will increase its price.
Is Petrol Tax Same in All Places of Kolkata?
West Bengal imposes an equal VAT rate on petrol across the state. Thus, whether an individual is a resident of Kolkata or any other city of the state, he or she is liable to pay a similar rate tax on petrol.
Thus, this is all about the petrol tax in Kolkata. However, remember that the final petrol price may vary across the state. Hence, keep an eye on the latest updates periodically to avoid hassles later.
Frequently Asked Questions
How much did the West Bengal Government collect sales tax on petrol?
The State Government of West Bengal collected approximately 25% of VAT or sales tax on petrol as of November 2021.
How much revenue has the West Bengal Government lost after the reduction in excise duty on petrol?
The revenue of West Bengal had been lowered by 82 paise per litre of petrol after the Central Government’s decision to reduce excise duty on petrol.