The price of petrol has reached an all-time high of Rs 82.33 per litre in Pune, while the price of diesel is Rs 69 per litre. But, say dealers, the rising fuel prices can be slashed if the government does away with the additional taxes imposed on them.
The state Congress has now taken up this issue and demanded that petroleum products be brought under the ambit of the Goods and Services Tax (GST). The party has also demanded that the state government scrap other taxes to bring down fuel prices, a demand made earlier by the All India Petrol Dealers’ Association.
In a letter sent to Chief Minister Devendra Fadnavis on Monday, state Congress chief Ashok Chavan said the government should waive off the other taxes and duties, as it will help ease the burden for citizens. “Fuel should be brought under the ambit of GST,” he said.
Congress spokesperson Sachin Sawant said,”If petroleum products are brought under GST, automatically, the other taxes imposed on petroleum products will disappear. This is because under GST, only one tax is allowed…”.
Sawant claimed that as per the Congress’s calculations, if petroleum products came under GST, their prices would come down by at least 50 per cent.
“We have been demanding that the other taxes on fuel be scrapped…,” said Sumit Dhumal, president of AIPDA’s Pune unit. The AIPDA said about 25 per cent Value Added Tax (VAT) is added to the basic price of petrol — Rs 44.82 per litre. “That’s Rs 13.92… plus, there is central tax of 19 per cent, which is Rs 11, as well as Rs 10 cess of state and central governments, Rs 3 dealer commission and 47 paisa licence fee of oil companies,” said Dhumal,.
The Association said if petroleum products are brought under the ambit of GST, they would fall in the 28 per cent tax bracket. “Currently, on the basic price of Rs 42, the tax is almost 100 per cent… the price would come down…,” said the AIPDA.
State Congress chief Chavan cited the example of neighbouring Karnataka, where petrol was cheaper by Rs 9 per litre and diesel by Rs 3.50. “In Maharashta, the government imposes VAT, surcharge and cess. In 2015, the government had imposed drought cess of Rs 2 on fuel prices. Even after the drought ended, the cess continued,” he said.
Another party leader said petroleum products were kept out of the GST net as they were a major source of revenue for cash-strapped state governments.