[Meph1st0]

Originally Posted by carboy

Part of that 7 Rs decrease is automatic - since VAT is a percentage. Since the price before VAT went down, the VAT automatically went down. The right way to present this data is to present it as state reduced VAT from x% to y%.

One cannot expect our journalists to do so much digging. But if the tweet is true, diesel price has come down in Bangalore by Rs.23. That is Rs.13 reduction in vat. Karnataka charges 24% VAT on diesel, so the reduction in VAT due to excise duty reduction should be Rs.2.4, the rest of it is by decreasing VAT. Anyways, I will head out later and check the actual reduction.

[girishv]

The price of Diesel in Bangalore is Rs 81.50. It is Rs 24 less compared to earlier price of Rs 101.50.

Its Rs 7 more than Rs 10 reduction of centre + Rs 7 reduction from state.

Similarly, petrol is reduced by Rs 18.43 not just Rs 12.

Originally Posted by carboy

Part of that 7 Rs decrease is automatic - since VAT is a percentage. Since the price before VAT went down, the VAT automatically went down.

Union Taxes are flat - so is presented as Rs X. State taxes are Ad Valorem & hence a journalist should be presenting it as State VAT Rate has been decreased from x% to y%.

[whitewing]

Originally Posted by nettooran

My friend owns a petrol pump. He took stock today evening. A straight loss of 2.5 lakhs in a day. He was having a happy time for a few months. All those bonus in price savings lost in a day .

Really!! The risk of a change in taxes does not get reflected back through the supply chain? Sounds unfair to the distributors in that they are forced to take a gamble every time they tankup.

[carboy]

Originally Posted by girishv

The price of Diesel in Bangalore is Rs 81.50. It is Rs 24 less compared to earlier price of Rs 101.50.

Its Rs 7 more than Rs 10 reduction of centre + Rs 7 reduction from state.

Similarly, petrol is reduced by Rs 18.43 not just Rs 12.

OK, but the point of presenting the figure as a percentage still holds. Union Tax increase/decrease is a flat figure, while State VAT increase/decrease is usually a reduction in the rate (there are exceptions - as when Maharashtra had levied a drought cess of Rs. 2 on fuel from 2015 to 2018, I think).

[Pancham]

Originally Posted by abhijet.sen

There is nothing misleading in it unless one wants to treat it that way. Many states have reduced their VAT on top of duty cuts by central government. So expect a cumulative more than Rs 10 decrease for petrol and more than Rs 15 for diesel in those states.

Although I reckon this is coming too late and moreover, they should bring these products under GST.

Sir, if only you had read the remaining lines in my post. The VAT gets automatically reduced when you cut down the excise. So state governments announcing VAT cuts- does it imply additional cuts or is it just the cumulative effect they are talking about? That was my question last night. It’s clear now.

And I echo others here. I won’t be surprised to see an increase of more than 10 bucks in the next 4-8 weeks. But it will happen gradually - 30/40 paise per day. But every time they campaign, they will remind you how they reduced 10 bucks in one go.

[longhorn]

Originally Posted by adityadeva

Comparing india to the small South Asian country like Singapore would be huge disparity by any means. The economy, the size of the population, and the coherence of thought ( we are no where near it with such diverse and opposing views ).

The country in question is the Philippines, not Singapore. One Philippine peso = 1.45 INR so we are more or less even on the strength of the currency of the respective countries, unlike the Gulf which stands at about 20x.

Originally Posted by adityadeva

Also I don't think this matter has to be taken politically and emotionally at all, in one way or other as long as we import fuel and burn it out - we burn a huge hole in our own pocket whether there's tax or less tax or subsidy.

There is nothing political or emotional in my statement. That's about it. All the vague statements given by various ministers from time to time (building toilets / nation building / skirmish at the border etc) have just gone on to prove my point. The head of the finance ministry has absolutely no clue about finance or economics. The bigger problem though, is the high handedness and total lack of willingness to bring in experts to do the job.

[JJ1991]

Don't understand why many people are terming this as a diwali gift, looks purely political to me. It's the same a jacking the price up and giving a paltry discount. But for whatever reasons it may be it's a slight relief for the common man.

[PrasannaDhana]

Originally Posted by Shreyans_Jain

And there are plenty of idiots who will believe this is a generous Diwali gift from their benevolent supreme leader.

Bad timing on my part to tank up the Jeep last night.

Sadly, there are a lot of idiots who would believe so, and I am pretty positive that the Supreme leader will reap fruits in the upcoming states elections.

PS: Even worse timing on my part, I refilled all my school buses yesterday

But then, it is going to be a lot less expenditure on buses fuel until this stunt comes to an end.

A common question from a common man - If government can lift off this burden from its own people in a jiffy, why load it on them in the first place?

I understand there will be many BHPians who can come up with very valid Nation building justifications. Beyond everything, that question will always linger in the minds of every common man.

[V.Narayan]

Sadly this thread is a rant where any one sharing data that does not agree with the popular {and I dare say justified} anger is booed and shooed. In response to the question below members here may in the large part not be old enough to remember we had marginal income tax rate of up to 97% in the 1960s & 1970s - everyone on this forum with two or more cars would have been in that bracket. IIRC earning over Rs 10,000 a month attracted that rate that's like Rs 300,000* a month today - enjoy. And all CEOs of any company had their monthly pay capped, by law, at Rs 7000 a month {~Rs 210,000* today}. Excise duty and customs were variously 1.5X to 3X higher than today respectively. We have every right to be upset at the current fuel price hikes by a Govt that has not earned itself any plaudits in managing the economy. But let's not assume that India lived in a golden era before.

Originally Posted by ABHI_1512

Wonder how a country which just got independence managed to build IiTs, IIMs, AIIMS, various atomic centers, various universities, various colleges, road projects (of course not of ALE standards) and various developmental projects, polio eradication and most of all, fought three wars and still didn’t tax the people like the way it is happening now !!

*I have assumed 1970 roughly as the mid-point year of that era of license raj ,salary control, banned imports and tax on exports

[Pancham]

Meanwhile in Kolkata, petrol stands at INR 104.xx and diesel still at INR 101.xx. Price of diesel has not yet been updated I think.

[Ragavsr]

Just filled the tank up with diesel at 91.53 before the Diwali gift of Supreme leader goes away and prices are increased by 40 paise daily to get back to the usual rate in 15-20 days.

[Naetik30]

Originally Posted by V.Narayan

But let's not assume that India lived in a golden era before.

Sir, I agree with most of your comment here. But have a problem with your statement above.

Why is it not OK to criticize a policy or performance of the current dispensation without having to compare against the previous govts. Is it never OK to be objective and call a spade a spade?

When do we stop looking back? The current opposition is decimated. And let's all agree that history has already judged their performance. And pretty much directly led to creation of the current behemoth.

But the current one is the problem. It affects everyone's present.

[nettooran]

Originally Posted by whitewing

Really!! The risk of a change in taxes does not get reflected back through the supply chain? Sounds unfair to the distributors in that they are forced to take a gamble every time they tankup.

Nope. Unless the full payment is done , the lorry does not leave the refinery. That is how it has been. That means they get the advantage in case price increase also, if they have stock bought at lower price.

[V.Narayan]

Originally Posted by Naetik30

Sir, I agree with most of your comment here. But have a problem with your statement above.

Why is it not OK to criticize a policy or performance of the current dispensation without having to compare against the previous govts. Is it never OK to be objective and call a spade a spade?

When do we stop looking back? The current opposition is decimated. And let's all agree that history has already judged their performance. And pretty much directly led to creation of the current behemoth.

But the current one is the problem. It affects everyone's present.

Dear @Naetik30, Thank you for reading my post. First a Happy Diwali to you and your family. You may be assuming rather naively that I am in love with the current administration. That is an assumption on your part. I am no where saying we cannot or should not criticize. I am only making a point on the statement quoted to clarify we were not a low tax regime in earlier days. For clarity I quote my view on the current administration's economic competence. I hope my point is clear.

Originally Posted by V.Narayan

We have every right to be upset at the current fuel price hikes by a Govt that has not earned itself any plaudits in managing the economy. But let's not assume that India lived in a golden era before.

The reduction yesterday has nothing to do with economics or heart but politics. The Govt has elections in two States in less than 4 months!!!

[Emvi]

This thread has always been interesting and informative, now it's turning hilarious on occasions as well. The ruling government was(and is) constantly subjected to heavy criticism for the fuel price rise and RIGHTLY so from a neutral POV.

Justifications given have been scrutinized, lambasted, laughed at and what not. I don't think these reactions were(and are) completely unwarranted given that not everyone is an expert in the field of economics including myself. However, I find it amusing that we have not stopped ranting even though the prices have been reduced by a good margin now.

Make no mistake, fuel prices are still not cheap. India is a country of 27..28 states(I have seriously lost count). Elections, by-elections are a regularity at various levels of public governance system. As an average citizen of this diverse country with limited knowledge about economics(which by the way, majority of citizens are), I am happy that the fuel prices have come down at the moment. Will it rise again with vengeance in the coming days? Well, it's hard for anyone to predict it now. But, but.. instead of living in the past or for that matter ranting about what might happen in the future (which I and you surely don't know), I feel now it's a good time to clock some miles on your favourite set of wheels and enjoy the festive season.

Cheers!