Petrol and Diesel Tax in India: Central and State Tax on Petrol & Diesel in India

Rising fuel prices are a cause of concern for every Indian citizen whether they already own a vehicle or are planning to buy one. However, have you wondered why fuel prices tend to differ across states?

Well, it is due to the taxes levied by the Central and State Governments on the retail prices of petrol and diesel. So, if you wish to know the applicable diesel and petrol tax in India across the different states, keep reading.   

Petrol and Diesel Tax in India

Petrol tax in India consists of 55% of petrol's retailing price while diesel tax is 50% of the fuel's retail value. Apart from this, sales tax and Value Added Tax (VAT) are levied at varying rates by the State Governments. 

Here are the major charges present in India’s fuel pricing structure:

• Base price of crude oil 
• Excise duty
• Dealer’s commission and charges
• Value Added Tax (VAT)  

Now, crude oil prices, dealer’s charges and excise duty remain the same all over India. However, VAT and sales tax tend to differ across states, leading to a variation in fuel prices. 

Central and State Tax on Petrol and Diesel in India

Both the central and state governments of India levy taxes on petrol and diesel. The central authorities apply excise duty at the rates of Rs.19.90/litre and Rs.15.80/litre respectively. This rate remains the same throughout the country. 

On top of this, the state governments levy VAT, sales tax and other additional charges. The rates of these taxes tend to vary, leading to a difference in petrol and diesel prices across India.  

State Wise Tax on Petrol and Diesel in India

Check out the diesel and petrol tax in India across the different states:

*Tax rates are as of 29 July 2024

Petrol and Diesel Tax Breakup

To understand the breakup of diesel and petrol tax in India, let’s take the example of fuel prices in Delhi.

Tax breakup of petrol prices in Delhi:

Tax breakup of diesel prices in Delhi:

Petrol Price Without Tax

Here is the actual price of petrol before applying the central and state tax on petrol in India:

Diesel Price Without Tax

Take a look at the table below to know the price of diesel without tax:

Diesel and petrol tax in India is levied by the government in order to collect lump-sum revenue from the public. These funds are mainly used for developmental activities and contribute to the nation’s progress. 

Additionally, being a responsible consumer, it is your duty to know these rates. Remember, petrol pumps are not allowed to overcharge you on the state’s applicable petrol prices. Thus, knowing these rates is important for you to ensure that you are justly charged when buying fuel.