Special cess, VAT on fuel makes it costliest for citizens

Aurangabad, Jan 8:

While rumors are circulating on social media that the central government is preparing to levy a new corona tax on fuel, the shocking fact is that the special cess imposed by the state government from time to time in past many years has also pushed up the fuel prices. The state government levies 26 per cent and 24 per cent value added tax (VAT) on petrol and diesel along with the special cess. Similarly, the cess of Rs 1 for rehabilitation after the 1993 Killari earthquake and a cess of Rs 3 on diesel still continues. Due to this, the citizens of the state have to buy the most expensive fuel in the country.

Apart from the main taxes on fuel, cess is levied by the Center and the states for various reasons. However, despite the fact that many years have passed for the incidents for which the cess was imposed, still the citizens have to pay the price. In March 2015, a cess of Rs 3 was imposed on petrol and Rs 2 on diesel due to drought in the state. Apart from this, in Mumbai-Pune, a 5 per cent tax was being levied by petroleum companies in the name of state specific cost. After its abolition, a cess of Rs 2 per liter was levied on petrol across the state. A cess of Rs 2 has been levied on petrol after a court order to remove liquor shops and bars within a distance of 500 meters from the highway. Two years have passed since this decision, but the cess remains unchanged. In 2018, when petrol was priced at Rs 89 per litre, the tax was reduced by Rs 2.50 in response to the central government''s call, but on April 1, 2020, a new cess of Rs 1 was levied.

Tax collection for road use

The Center had started levying tax on fuel at the rate of Rs 1 per liter in the name of Center Road Fund in 2001. The tax is still levied at Rs 18 per liter. Out of this, at least Rs 3.5 lakh crore is collected daily in the country. Apart from this, toll tax and road tax are levied for driving and purchase of a vehicle.