[Inquilab28]

My petrol S Cross now costs a sour 4000 rs to get a tank fill.. sick :(

Not want to make any political point, may be the current govt is right, but if i spend 10000 every month just on fuel, i dont know how rational this car owning decision is...

[ptaneja]

Originally Posted by Inquilab28

My petrol S Cross now costs a sour 4000 rs to get a tank fill.. sick :(

Not want to make any political point, may be the current govt is right, but if i spend 10000 every month just on fuel, i dont know how rational this car owning decision is...

Only solution is - Drive Less
Dont expect any tax cuts on this milking cow !

For you, at 20km/ltr and spending around 10K a month, it would mean an average travel of 2600 odd kms per month !!
Drive Less - Save Fuel

[extreme_torque]

Originally Posted by carboy

In May 2012, petrol price was around Rs 75 per litre & there were fierce protests all over the country. Politicians were doing Andolans & Dharna all over the country protesting against fuel price.

Then Oil was at 100$ a barrel & 1$ = Rs. 56 - i.e. 5600 Rs per barrel of oil & petrol at the pump was Rs 75.

Currently oil is at 60$ a barrel & 1$ = Rs 76 i.e. 4380 Rs per barrel of oil & petrol at the pump is at Rs.90

So currently oil barrel is 21% cheaper than then, but petrol at the pump is 18% costlier. That tells you about the current loot as compared to a time when there were protests all over the country but there are no protests now.

Thats before we point out that bringing the value of Indian rupee up was also very high on the agenda of this government. Any guesses what happened.

[lurker]

Prices have now become very uncomfortable, no two ways about that, pity those who have to drive more than 1000 kms a month for they are going to be hit hardest.

The transporters and rest will start to pass on high prices to the end users failing which go bust. There is going to be either inflation or unemployment and that is going to go unreported or under-reported in desi mainstream media. Esp in case of trucking companies laying off employees.

Preparing for big numbers going electric route, the govt has also cleverly increased import duties on solar panels and solar inverters in the budget.

Anyway there doesn't seem to be any big idea or plan behind the price increases, just to fleece from anyone anywhere seems to be the mantra.

[ptaneja]

5.5 years of ownership of diesel vehicle, and this is the number of refills - and the graph is constantly rising.

[Aniket Verma]

Originally Posted by ABHI_1512

At the cost of sounding repetitive, here is an pictorial representation of the grand robbery that is happening in the name of fuel price.

Attachment 2120206

And here we are, we know how much the product costs in actual and yet we are paying such abnormal amounts of tax wilfully. Wonder how the country ran when fuel was subsidised since these days we are made to believe that every penny of tax from fuels is building the nation and is the reason for massive infrastructure development and what not !!

P.S- Picture sourced from Twitter and belongs to BusinessToday.

Why we often ignore subsidies (Earlier to Petrol and now to other sections of Economy)? Govt. can not just print money for expenses.

How many of us had bleeding Hearts for migrants (travel & food subsidy), support current MSP for famers (though food grains are distributed through PDS at fraction of procurement costs) and other societarian spending?

Govt. earns through taxes and I find taxes on Petrol as most neutral. Only people who use them have to pay (rather than blanket Cess on income) and they do have many avenues to mange the spend (Change in consumption pattern, Alternative modes of transport & EV).

[aaggoswami]

Originally Posted by Aniket Verma

Why we often ignore subsidies (Earlier to Petrol and now to other sections of Economy)? Govt. can not just print money for expenses.

How many of us had bleeding Hearts for migrants (travel & food subsidy), support current MSP for famers (though food grains are distributed through PDS at fraction of procurement costs) and other societarian spending?

Govt. earns through taxes and I find taxes on Petrol as most neutral. Only people who use them have to pay (rather than blanket Cess on income) and they do have many avenues to mange the spend (Change in consumption pattern, Alternative modes of transport & EV).

Are there any numbers with us, like what is the total direct and indirect tax collection as a percentage of GDP ? Is fuel the only source to generate tax revenue ? This is unending and will eventually hit a wall, what next then ? Stagflation is a situation I wish India doesn't end up in.

Next up, many are forced to use petrol/diesel due to lack of urban planning and a robust, secure public transport. If I had option of a well connected and planned (like the one with car and bike parking facility) Metro in my City I would prefer using it. Metro isnt a reality even in the biggest city of Gujarat at the moment. Currently taxing petrol is like extracting indirect tax as people are forced to use it.

[Aniket Verma]

Originally Posted by aaggoswami

Are there any numbers with us, like what is the total direct and indirect tax collection as a percentage of GDP ? Is fuel the only source to generate tax revenue ? This is unending and will eventually hit a wall, what next then ? Stagflation is a situation I wish India doesn't end up in.

Here you go. As long as we are engaged with socialist economy, Govt. will be putting tax on us. As you have said, this debate is never ending.

Personally, I will prefer paying Tax on the product / service which I consume, rather than a blanket Tax on my Income or Hybrid of the two.



Image Source: PIB Twitter handle.

[giri1.8]

People who think diesel prices are okay should remember that, every single man made thing around us was probably shipped by a diesel vehicle. This price rise needs to stop, else we'll face inflation soon.

[carboy]

Originally Posted by Aniket Verma

Personally, I will prefer paying Tax on the product / service which I consume, rather than a blanket Tax on my Income or Hybrid of the two.

I am sure you will. So will I. This is because the richer a person is, the better indirect taxes are for him because indirect taxes are not progressive while direct taxes are progressive. The poorer a person is, higher is the percentage of his income which he spends every month. Ergo, indirect taxes hit the poor person more than someone who is richer than him.

[Aniket Verma]

Originally Posted by carboy

I am sure you will. So will I. This is because the richer a person is, the better indirect taxes are for him because indirect taxes are not progressive while direct taxes are progressive. The poorer a person is, higher is the percentage of his income which he spends every month. Ergo, indirect taxes hit the poor person more than someone who is richer than him.

How does being rich or poor came in here?

Direct taxes are involuntary, whereas Indirect taxes are proportionate to consumption and an individual has a choice / control over it.

Take example of 3 individuals with salary of Rs 50,000/- pm.

A - Walks to his workplace
B - Uses public transport for his workplace
C - Uses a vehicle for going to his workplace

So, who will be benefited most here? As everyone has to pay equal Direct Tax on income, but have different consumption pattern of fuel.

One more issue is of bifurcation of Central & State taxes. Both of them are guilty of increasing the respective taxes and it's the State governments which are not allowing Fuel to move to GST regime (no one wants to kill gold laying goose), which will theoretically give some relief to end consumers.

Bottom line is that unless govt. either decreases its spending or increase tax from other sources, tax on fuels are going to stay.

[lurker]

Originally Posted by Aniket Verma

Govt. earns through taxes and I find taxes on Petrol as most neutral. Only people who use them have to pay (rather than blanket Cess on income) and they do have many avenues to mange the spend (Change in consumption pattern, Alternative modes of transport & EV).

If it were such a win-win strategy then why don't countries like Nepal, Pakistan, Sri Lanka, Bangladesh charge even higher prices on petrol, they surely have more use of this money being economically challenged in these covid times. A few of them are on the brink of default even.

The only countries charging sky high on fuel are Norway, Sweden, Japan, Germany because their incomes per capita are so high that these economies have turned themselves into high price economies with proper social net for those unable to sustain.

Compare that to India where the prices are that of a first world economy even before bringing social net anywhere close to that of first world. And if anyone responds by saying that this is how you become first world then it is like the great rope trick, it went up or did it.

[carboy]

Originally Posted by Aniket Verma

How does being rich or poor came in here?

It comes in because direct taxes are progressive while indirect taxes aren't progressive.

Poor people spend a majority of their income. The richer the person the lesser the percentage of his income he spends. In indirect taxes, you get taxed based on what you spend rather than on what you earn. Most poor people spend 90% to 100% of their income. So he is taxed on 90% to 100% of his income. I spend around 50% of my income, so I get taxed on 50% of my income. A Billionaire probably spends only 1% of his income, so he gets taxed only on 1% of his income.

OTOH, in direct taxes, the higher your taxes, the higher the slab you fall in.

This is why indirect taxes are non-progressive & direct taxes are progressive.

This is why I prefer direct taxes more than a poor person who lives hand-to-mouth & spend most of the money he earns every month. And a Billionaire prefers it even more than me.

[Aniket Verma]

Originally Posted by carboy

It comes in because direct taxes are progressive while indirect taxes aren't progressive.

Poor people spend a majority of their income. The richer the person the lesser the percentage of his income he spends. In indirect taxes, you get taxed based on what you spend rather than on what you earn. Most poor people spend 90% to 100% of their income. So he is taxed on 90% to 100% of his income. I spend around 50% of my income, so I get taxed on 50% of my income. A Billionaire probably spends only 1% of his income, so he gets taxed only on 1% of his income.

OTOH, in direct taxes, the higher your taxes, the higher the slab you fall in.

This is why indirect taxes are non-progressive & direct taxes are progressive.

This is why I prefer direct taxes more than a poor person who lives hand-to-mouth & spend most of the money he earns every month. And a Billionaire prefers it even more than me.

Then I am afraid that you neither understand the fuel consumption pattern in India or how spending & saving works.

In India, Diesel outsells Petrol by the ratio of 2.5:1.



Source: Statista.com


Now, who consume this Diesel??



Source: pib.gov.in

• Only 13.5% of Diesel is consumed by private vehicles, i.e. those who pays Direct tax

• Majority of these have to pay up to 30% Tax on income + Interest on vehicle loan amount + No claim to depreciation + Reducing resale value + Potential scrappage at the end of 10 years (if you are in NCR)

• While majority of top end pvt. SUV & Luxury vehicles users belongs to business community, an pay no Direct tax

• Remaining consumers, either pay no Direct tax or relatively low Corporate tax + Benefit of claiming consumption as expense + Depreciation benefits

Till there is a subsidy on Diesel, a direct tax payer will be subsidizing the Diesel consumption of remaining 90% of Diesel consumers, which in my understanding is not fair.

Any further debate of Direct & Indirect taxes will take us off topic, as it is an emotional subject for many, but only vilifying one group without understanding overall consumption pattern is kind of a norm these days.

[carboy]

Originally Posted by Aniket Verma

Then I am afraid that you neither understand the fuel consumption pattern in India or how spending & saving works.

What exactly are you saying here? That poor people do not spend a higher percentage of their income as compared to people who are richer than them?

Originally Posted by Aniket Verma

Till there is a subsidy on Diesel

How is there a subsidy on diesel? Diesel costs around 35-40 Rupees to manufacture & is sold at 85 rupees a litre? How did you figure out that diesel is subsidised?