State tax on petrol, diesel reaches all-time high

Govt charges Rs 20/liter petrol, Rs 14 for diesel

Srinagar, Publish Date: Jan 24 2018 12:26AM | Updated Date: Jan 24 2018 12:26AM
State tax on petrol, diesel reaches all-time highFile Photo

While the Jammu and Kashmir government is mulling to bring petroleum products under newly implemented GST regime, state tax on petrol and diesel has reached all-time high of Rs 20.28 a liter and Rs 12.44 per liter respectively.

The rising petroleum prices have made things costlier in this consumer state, where majority of goods are imported and transportation dependent. J&K’s inflation for the months of November and December have crossed 8 percent, putting a huge burden on the people of this consumer state.

A senior government official informed that consumers in J&K have to bear the burden of tax chargeable at the rate of 24 percent on a liter of petrol, plus Rs 3 charged as cess by the state government. Besides there is profit provision of Rs 3 a liter for dealers.

Similarly, on diesel state government charges Rs 11.44 tax a litre at the rate of 16 percent tax plus cess of Rs 1 a litre.

With the central excise duty and other entry taxes, the total tax percentage reaches about 52 percent on petrol and 46 percent on diesel, which means actual cost of a liter of petrol, which a consumer buys for Rs 75 in Srinagar is only about Rs 37. 

The petrol prices have witnessed Rs 7.80 a litre hike in last six months from July. Currently petrol litre is priced at 75.71 a litre, a petrol dealer informed.

“Diesel is priced at Rs 65.26 a liter. It was priced at Rs 56.84 a litre six months back. Thus a hike of Rs 9.56 a liter,” informed a petroleum dealer who didn’t want to be named.

The petroleum dealers said they are facing double edged sword as the union petroleum ministry revises petroleum prices on daily basis from June last year, while at the same time high rate of tax charged by state government is leading to hike in petroleum prices every now and then.

“Earlier the government used to announce hike in petroleum prices, but now they have been adopting daily revision of rates which dealers are informed in the morning, means that consumers don’t come to know about hike in prices which was not the case earlier,” they said.

“We have urged the state government to reduce the tax rate on petrol, but instead of reducing it government few year back increased it from 20 percent to 24 percent,” Bashir Ahmad, a petroleum dealer.

As the international prices witnessed a downfall from 2014 both the centre government and J&K government increased taxes and duties on the petroleum products, particularly petrol and diesel. Now the prices of petroleum has gone up again, experts say that both the centre and states need to reduce the taxes, as they will be still able to generate more revenue due to price hike. 


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