Delhi High Court to hear petition against rising fuel prices today

Gladys Abbott
September 12, 2018

The Central government imposes excise duty worth Rs 19.48 and Rs 15.33 on petrol and diesel prices per litre respectively.

CM Chandrababu Naidu announced cut-off in petrol and diesel prices by Rs 2 in Andhra Pradesh, after Vasundhara Raje in Rajasthan on the day nationwide shutdown called by oppositions. Petrol prices on Tuesday touched a scorching Rs 90.11 in Maharashtra's Parbhani while diesel prices also increased from Rs 77.92 to Rs 78.06, Parbhani District Petrol Dealers Association (PDPDA) President Sanjay Deshmukh said.

Daily change in fuel prices was an "economic policy decision" of the central government and the courts must remain away from it, the Delhi High Court said Wednesday.

Mumbai has the highest Value-Added Tax of 39.12 per cent on petrol, while Telangana levies the highest Value-Added Tax of 26 per cent on diesel.

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"The increase in petrol and diesel prices is likely to give States a windfall gain of around ₹22,700 crore over and above the budget estimates for the current fiscal".

On Monday, the petrol price was Rs 89.97 and diesel stood at Rs 77.92 in the town with a population of around 3,10,000, around 500 kms east of Mumbai in Marathwada region. Across all states, Maharashtra pays the most for petrol because of a high VAT of 39.12% in Mumbai, Thane and Navi Mumbai, while the tax rate for the rest of the state is 38.11%. Petrol and diesel prices are going up, the state government will certainly come up with some measures like last time, Kesarkar said. However, this will result in a revenue loss of around Rs 12,000 crore (net of Rs 34,627 crore loss and Rs 22,700 crore gain from oil bonanza) to the states.

The state that charges the maximum sales tax/VAT on diesel - 28.08 per cent - is Andhra Pradesh. In Bengaluru, the price of petrol is Rs 83.51 and that of diesel is Rs 75.32. "Though many States are having a revenue surplus, they use the surplus revenue to finance capital expenditure and interest obligations, " the report said.

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