[rajshenoy]

Originally Posted by firstguri

As far as I know, there is no subsidy. On the contrary there's 265% tax on fuel in India!

I was reading about how oil bonds are having a role to play(not sure how major though). Few questions still remain though, why not bring fuel under GST net? The same states having high prices seem to be reluctant, as well as reduce their share of the tax(easily INR 10+ can be shaved off in an instant)

Also from what i see, prices in Shell outlets are INR 5-6 more compared to that of PSU.

[AZT]

Originally Posted by rajshenoy

I was reading about how oil bonds are having a role to play(not sure how major though).

Below article should clear things up. The Oil bonds thing is wrong and misleading. Author also points to another 2018 article he'd written on the same subject, these are recurring forwards which surface whenever we as people start asking why prices are so high.

https://vivekkaul.com/2021/06/17/pet...-of-oil-bonds/

[m8002?]

Originally Posted by rajshenoy

I was reading about how oil bonds are having a role to play(not sure how major though). Few questions still remain though, why not bring fuel under GST net? The same states having high prices seem to be reluctant, as well as reduce their share of the tax(easily INR 10+ can be shaved off in an instant)

Also from what i see, prices in Shell outlets are INR 5-6 more compared to that of PSU.

The oil bond stuff keeps coming up every other page where people genuinely think this was something thrust on them by the previous regime. Need to congratulate the government in doing a great job of convincing people why they should pay these huge taxes.

GST is another ball game altogether. With the centre falling back on the promise of paying the tax deficit to states and adding ad-hoc taxes to fill its own coffers, states will be more reluctant to bring fuel under GST.

[firstguri]

Originally Posted by rajshenoy

Few questions still remain though, why not bring fuel under GST net? The same states having high prices seem to be reluctant, as well as reduce their share of the tax(easily INR 10+ can be shaved off in an instant).

Well we'll have to go off-topic but the simple answer is to that is the central government and all the state governments have to be same for fuel to come under GST. Reason being the GST council consists of finance ministers of country, states and UT. For something to be passed by the council all the finance ministers have to agree and even if one objects, it's cancelled.

There will always be state governments different from the centre government and the finance ministers from those states will never let fuel, liquor and tobacco products to come under GST as it'll hamper their earnings and let's not forget, the political parties also need money. So when a party is not ruling Delhi, their earnings are from their states .

That unfortunately is the sad truth and why we may never see fuel under GST.

[AutoNoob]

Received on WhatsApp :

[Akshay6988]

Don't know why people are moaning about rising petrol prices here. Today when I tanked up my car with petrol at 107.35 ₹ per liter, I was overwhelmed with joy as my hard earned pre taxed money was being spent on atrociously taxed fuel. The petrol pump attendant congratulated me for contributing to the nation's growth. I was trying to book slot for vaccine since two weeks but to no avail. As soon as I swiped my card at petrol pump, I got slot booking message from Cowin portal. So the whatsapp forwards stating that taxes on fuel are used to provide free vaccines to everyone are true ! As I was exiting the pump, I glanced at PM's poster about Ujwala Gas Cylinder scheme, and I smiled remembering how I paid 851 ₹ for a lpg cylinder yesterday. I realised that if I keep paying high prices for these commodities, I could keep seeing PM's smiling face plastered on posters everywhere. I do hope fuel prices reach 200 ₹ a liter so that "vikas" can be achieved at twice the speed as compared to now.
Jai Hind !

[DigitalOne]

Calculation of fuel price:

Base price + Excise (charged by central government) + VAT (charged by respective State governments).

Excise is a fixed amount independent of Base price.

State VAT is a percentage calculated on top of Base price + Central Excise.

When international oil prices go up, the state VAT revenues go up automatically.

MP, MH are high VAT states. Delhi, UP, GJ etc are some othe states where VAT is lower. The difference in today's petrol price between high VAT states and low VAT states is almost 10rs.

[vishnurp99]

Originally Posted by DigitalOne

Calculation of fuel price:

Excise is a fixed amount independent of Base price.

State VAT is a percentage calculated on top of Base price + Central Excise.

If this is the case why are the state governments not lowering VAT or fixing VAT at a fixed level for petrol and diesel? Seems like a case of pot calling the kettle black.

[N.A.GTC]

Originally Posted by vishnurp99

If this is the case why are the state governments not lowering VAT or fixing VAT at a fixed level for petrol and diesel? Seems like a case of pot calling the kettle black.

Because their revenues have gone down after VAT was removed for all other items and the central government didn't release the money that was promised to the states under GST regime.


Also, shouldn't excise also go up as the base prices go up? Surely excise would be on a percentage basis, not a fixed number?

[vishnurp99]

Originally Posted by N.A.GTC

Because their revenues have gone down after VAT was removed for all other items and the central government didn't release the money that was promised to the states under GST regime.

Essentially you are saying that the states are cash strapped because of GST shortfall and hence they are profiteering on the petrol/diesel VAT.

In my humble opinion, this is centre's argument too. Revenues are tight because of pandemic. They need the petrol/diesel excise to pay the bills.

The centre and the states are doing the exact same thing! In fact the states gain from increased fuel prices because of the VAT being a percentage of the underlying base + excise.

The citizens should demand for fuel to come under GST. Both the states and centre needs to cut their expenses and cutting down on seperate local taxes is one way to do that.

[batish]

Originally Posted by vishnurp99

The citizens should demand for fuel to come under GST. Both the states and centre needs to cut their expenses and cutting down on seperate local taxes is one way to do that.

They'll never put fuel under GST. Few months back this topic was being discussed, listen what this Modi says.

https://youtu.be/vwLfXAXGwgE

and I was thinking they'd forego these lakhs of crores to promote EVs.

[rjainv]

Originally Posted by vishnurp99

Essentially you are saying that the states are cash strapped because of GST shortfall and hence they are profiteering on the petrol/diesel VAT.

In my humble opinion, this is centre's argument too. Revenues are tight because of pandemic. They need the petrol/diesel excise to pay the bills.

The centre and the states are doing the exact same thing! In fact the states gain from increased fuel prices because of the VAT being a percentage of the underlying base + excise.

The citizens should demand for fuel to come under GST. Both the states and centre needs to cut their expenses and cutting down on seperate local taxes is one way to do that.

I am not sure if actual reported figures support that revenue is tight.

GST just hit all time high recently

https://www.ndtv.com/business/goods-...of-gst-2425884


Direct income tax at all time high

https://www.google.com/amp/s/theprin.../679167/%3famp

[vishnurp99]

Originally Posted by rjainv

I am not sure if actual reported figures support that revenue is tight.

GST just hit all time high recently

Actually GST collection per month is the important number. The June numbers have dropped to 93K crores which is substantially lesser than the April numbers that you shared.

In my humble opinion the govt revenue is under stress.

[Sentinel17]

https://www.financialexpress.com/eco.../2287253/lite/

Do you concur with this?Does this make sense?
(asking,because I am no expert in this)
Because if it does make sense,can the present government really be held responsible?And does this justify the current raging prices of fuel?

[Doo_Dev]

Originally Posted by Sentinel17

https://www.financialexpress.com/eco.../2287253/lite/

Do you concur with this?Does this make sense?
(asking,because I am no expert in this)
Because if it does make sense,can the present government really be held responsible?And does this justify the current raging prices of fuel?

I am also not an expert but based on my understanding the info in the article is true but it has been manipulated to push the blame on previous govt.

1. Oil bonds usually have a 15- 20yrs timeline. So for bonds issues in 2000, the govt should have paid, if not they are due for payment . But these bonds are usually renewed with new bonds. So govt will keep issuing new bonds when the old one expires.
2. To put some other numbers in perspective , the govt took about 2.8 Lakh crores from RBI surplus/reserves in the last 2/3 yrs ( 2019 :1.79 Lakh crores ,2021 - 99 ,122 Crores.) . If this money is still available , they could easily payout the 1.4 Lakh crores supposedly due for oil bonds and provide more bonds. .

So I see the news article as a planned misdirection / manipulation of numbers.