Question : Tax on Petrol and Diesel

(a) whether tax at the rate of 48.2% for petrol and 38.9% on diesel are being levied by the Union Government and the States;

(b) if so, the reasons therefor;

(c) whether these taxes are levied on the ground of subsidy being paid on kerosene and LPG;

(d) if so, the total money generated through taxes on petrol and diesel and subsidy paid on kerosene and LPG during the last three years;

(e) whether it is a fact that India is the only country where Price of petrol is 23.5% per capita of GDP; and

(f) if so, the steps taken or being taken by the Government to pass the benefit to consumers of low prices in international market and reduce tax rate especially after voluntary surrendering of subsidy on LPG?

MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI ANURAG SINGH THAKUR)

(a) and (b): The price buildup of petrol and diesel as on 1st July, 2019 (as per IOCL at Delhi) is given below:
(in Rs. per litre) S. No. Elements Petrol Diesel
1.
Price charged to Dealers (excluding Excise Duty and VAT)
33.94
38.48
2.
Central Excise Duty [A]
17.98
13.83
3.
Dealer Commission
3.54
2.49
4.
State VAT [B]
14.98
9.47
5.
Retail Selling Price [C]
70.44
64.27
6.
Total Tax incidence percentage [(A+B)*100/C]
46.8
36.3
The overall tax incidence comes out as 46.8% for petrol and 36.3% for diesel being sold at Delhi. Similarly, for other states/UTs, the rate of state VAT is different and the overall tax incidence changes accordingly.
(c): The taxes on petrol and diesel are not being levied only on the ground of subsidy.
(d): The details of gross Central Excise duty collected through taxes on petrol and diesel is as follows:
(in Rs. Crores)
Source: DG-System-CBIC/PrCCA
The details of subsidies/under-recoveries on PDS kerosene and domestic LPG since 2016-17 (on accrual basis) are given below:-
(in Rs. Crores)
Particulars
2016-17
2017-18
2018-19 (P)
PDS Kerosene
7,595
4,672
5,950
Total DBTL related subsidies
12,905
20,905
31,539
Total PMUY related subsidy
2,999
2,559
5,683
DBTK Subsidy
11
113
117
Total Subsidy/ Under-recovery
23,510
28,249
43,289
(e): same as (a) above
(f): Prices of petrol and diesel have been made market-determined by the Government with effect from 26.06.2010 and 19.10.2014 respectively. Since then, the Public Sector Oil Marketing Companies (OMCs) take appropriate decision on pricing of petrol and diesel in line with international product prices and other market conditions. The Government continues to modulate the effective price to consumer for Subsidized Domestic LPG and retail selling price of PDS Kerosene. The prices of petroleum products are linked to the price of respective products in the international market. Oil Marketing Companies take a decision on retail selling price after considering various aspects including international product prices, exchange rate, tax structure, inland freight and other cost elements.
As regards subsidized domestic LPG (up to the cap of 12 cylinders per annum to each household) and PDS kerosene, the prices continue to be modulated by the Government in order to insulate the common man from the impact of rise in international oil prices and the domestic inflationary conditions and the consumers continue to get these products at subsidized rates. The prices of non-subsidized domestic LPG are however determined by the OMCs in line with changes in international markets.
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Particulars 2016-17 2017-18 2018-19 (P)
Petrol
71,916
74,431
68,929
Diesel
151,214
150,836
144,471