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:
| State/Union Territory | VAT on Petrol | VAT on Diesel |
| Assam | Rs.16.80/litre or 21.95% VAT (whichever is higher) | Rs.13.60/litre or 20.88% VAT (whichever is higher) Rebate @ Rs.1.66/litre to a maximum amount of Rs.13.60/litre |
| Andhra Pradesh | Rs.4/litre VAT + 31% VAT + Rs.1/litre Road Development Cess and VAT thereafter | Rs.4/litre VAT + 22.5% VAT + Rs.1/litre Road Development Cess and VAT thereafter |
| Arunachal Pradesh | 14.50% VAT | 7.00% VAT |
| Andaman & Nicobar Islands | 1% VAT | 1% VAT |
| Bihar | Rs.16.65/litre or 23.58% VAT (whichever is higher) (30% surcharge is applicable on the VAT as irrecoverable tax) | Rs.12.33/litre or 16.37% VAT (whichever is higher) (30% surcharge is applicable on the VAT as irrecoverable tax) |
| Chhattisgarh | Rs.2/litre VAT + 24% VAT | Rs.1/litre VAT + 23% VAT |
| Chandigarh | Rs.12.42/litre or Rs.10/KL cess + 15.24% VAT (whichever is higher) | Rs.5.07/litre or Rs.10/KL cess + 6.66% VAT (whichever is higher) |
| Delhi | 19.40% VAT | 16.75% VAT + Rs.250/KL air ambience charges |
| Dadra and Nagar Haveli, Daman and Diu | 12.75% VAT | 13.50% VAT |
| Gujarat | 13.7% VAT+ 4% cess on Town Rate & VAT | 14.9% VAT + 4 % cess on Town Rate & VAT |
| Goa | 20% VAT + 0.5% Green cess | 17% VAT + 0.5% Green cess |
| Himachal Pradesh | Rs.13.50/litre or 17.5% VAT (whichever is higher) | Rs.10.40/litre or 13.90% VAT (whichever is higher) |
| Haryana | Rs.14.50/litre or 18.20% VAT (whichever is higher) + 5% additional tax on VAT | Rs.11.86/litre or 16.00% VAT (whichever is higher) + 5% additional tax on VAT |
| Jharkhand | Rs.17/litre or 22% VAT on the sale price (whichever is higher) + Rs.1/litre cess | Rs.12.50/litre or 22% VAT on the sale price (whichever is higher) + Rs.1/litre cess |
| Jammu & Kashmir | 24% MST+ Rs.2/litre employment cess (Rebate applicable up to Rs.4.50/litre) | 16% MST+ Rs.1.00/litre employment cess (Rebate applicable up to Rs.6.50/litre) |
| Kerala | 30.08% sales tax + 1% cess (social security cess @ Rs.2/litre) + Rs.1/litre additional sales tax | 22.76% sales tax + 1% cess (social security cess @ Rs.2/litre) + Rs.1/litre additional sales tax |
| Karnataka | 25.92% sales tax | 14.34% sales tax |
| Lakshadweep | 10% VAT | 10% VAT |
| Ladakh | 15% MST+ Rs.5/litre employment cess (applicable reduction of Rs.2.5/litre) | 6% MST+ Rs.1/litre employment cess (reduction of Rs.0.50/litre) |
| Maharashtra (Mumbai, Navi Mumbai, Thane and Aurangabad) | 26% VAT+ Rs.5.12/litre additional tax | 24% VAT |
| Maharashtra (Rest of State) | 25% VAT+ Rs.5.12/litre additional tax | 21% VAT |
| Madhya Pradesh | 29% VAT + 1% cess + Rs.2.5/litre VAT | 19% VAT + 1% cess + Rs.1.5/litre VAT |
| Meghalaya | Rs.13.50/litre or 13.5% VAT (whichever is higher) (including a Rs.0.10/litre pollution surcharge) | Rs 7.00/litre or 5% VAT (whichever is higher) (including a Rs.0.10/litre pollution surcharge) |
| Mizoram | 16.36% VAT | 5.23% VAT |
| Manipur | 25% VAT | 13.5% VAT |
| Nagaland | Rs.16.04/litre or 25% VAT (whichever is higher) + Rs.2/litre road maintenance cess (including Rs.5.5/litre rebate) + 5% surcharge | Rs.10.51/litre or 16.50% VAT (whichever is higher) + Rs.2/litre road maintenance cess (including Rs.5.1/litre rebate) + 5% surcharge |
| Odisha | 28% VAT | 24% VAT |
| Punjab | Rs.2050/KL cess + Rs.14.32/litre or 15.74% VAT plus 10% additional tax (whichever is higher) + Rs.0.25/litre (Special Infrastructure Development Fee) + Rs.0.10/litre (Urban Transport Fund) | Rs.1050/KL cess + Rs.10.02/litre or 12.00% VAT plus 10% additional tax (whichever is higher) + Rs.0.25/litre (Special Infrastructure Development Fee) + Rs.0.10/litre (Urban Transport Fund) |
| Puducherry | 14.55% VAT | 8.65% VAT |
| Rajasthan | 31.04% VAT + Rs.1500/KL road development cess | 19.30% VAT + Rs.1750/KL road development cess |
| Sikkim | 20% VAT + Rs.3000/KL cess | 10% VAT + Rs.2500/KL cess |
| Tripura | 17.50% VAT+ 3% Tripura Road Development cess | 10.00% VAT+ 3% Tripura Road Development cess |
| Telangana | 35.20% VAT | 27% VAT |
| Tamil Nadu | Rs.11.52/litre + 13% VAT | Rs.9.62/litre + 11% VAT |
| Uttarakhand | Rs.13.14/litre or 16.97% VAT (whichever is higher) | Rs.10.41/litre or 17.15% VAT (whichever is higher) |
| Uttar Pradesh | Rs.14.85/litre or 19.36% VAT (whichever is higher) | Rs.10.41/litre or 17.08% VAT (whichever is higher) |
| West Bengal | Rs.13.12/litre or 25% VAT (whichever is higher as sales tax) + Rs.1000/KL cess – Rs.1000/KL sales tax rebate (20% Additional tax on VAT as irrecoverable tax) | Rs.7.70/litre or 17% VAT (whichever is higher as sales tax) + Rs.1000/KL cess – Rs.1000/KL sales tax rebate (20% Additional tax on VAT as irrecoverable tax) |
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:
| Price Elements | Price (per litre as of 16th December 2022) |
| Price chargeable to dealers | Rs.57.35/litre |
| Average dealer commission | Rs.3.87/litre |
| Excise duty (charged by Central Government) | Rs.19.90/litre |
| VAT (applied by State Government) | Rs.15.60/litre {consisting of 19.40% of (price chargeable to dealers + Average dealer commission + excise duty)} |
| Retail selling price of petrol in Delhi | Rs.96.72/litre |
Tax breakup of diesel prices in Delhi:
| Price Elements | Price (per litre as of 16th December 2022) |
| Price chargeable to dealers | Rs.58.20/litre |
| Average dealer commission | Rs.2.55/litre |
| Excise duty (charged by Central Government) | Rs.15.80/litre |
| VAT (applied by State Government) | Rs.13.11/litre {16.75% of (price chargeable to dealers + Average dealer commission + excise duty)} |
| Retail selling price of diesel in Delhi | Rs.89.66/litre |
Petrol Price Without Tax
Here is the actual price of petrol before applying the central and state tax on petrol in India:
| Price Elements | Price |
| Crude oil costs | Rs.40/litre |
| OMC processing costs | Rs.7.35/litre |
| Buffer for inflation | Rs.10/litre |
| Petrol price before tax | Rs.57.35/litre |
Diesel Price Without Tax
Take a look at the table below to know the price of diesel without tax:
| Price Elements | Price |
| Crude oil costs | Rs.40/litre |
| OMC processing costs | Rs.8.15/litre |
| Buffer for inflation | Rs.10/litre |
| Diesel price before tax | Rs.58.15/litre |
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.
Frequently Asked Questions
Quick Summary
Fuel prices in India vary across states due to different taxes levied by Central and State Governments. Taxes consist of excise duty, VAT, and sales tax, leading to price variations. Each state has different tax rates. Excise duty and dealer charges are uniform across India. It's essential for citizens to be aware of these tax rates when purchasing fuel.
Was this summary helpful?
Clear offers taxation & financial solutions to individuals, businesses, organizations & chartered accountants in India. Clear serves 1.5+ Million happy customers, 20000+ CAs & tax experts & 10000+ businesses across India.
Efiling Income Tax Returns(ITR) is made easy with Clear platform. Just upload your form 16, claim your deductions and get your acknowledgment number online. You can efile income tax return on your income from salary, house property, capital gains, business & profession and income from other sources. Further you can also file TDS returns, generate Form-16, use our Tax Calculator software, claim HRA, check refund status and generate rent receipts for Income Tax Filing.
CAs, experts and businesses can get GST ready with Clear GST software & certification course. Our GST Software helps CAs, tax experts & business to manage returns & invoices in an easy manner. Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law.
Save taxes with Clear by investing in tax saving mutual funds (ELSS) online. Our experts suggest the best funds and you can get high returns by investing directly or through SIP. Download Black by ClearTax App to file returns from your mobile phone.
Cleartax is a product by Defmacro Software Pvt. Ltd.
Company PolicyTerms of use
ISO 27001
Data Center
SSL Certified Site
128-bit encryption