Petrol And Diesel Tax In India: Central And State Tax On Petrol & Diesel In India
Rising fuel prices remain a major concern for vehicle owners and prospective buyers in India. Petrol and diesel prices vary across states because each state levies its own taxes in addition to the central government's fixed excise duties, resulting in different retail fuel prices.
Latest Update:
- The Indian Government slashed the Special Additional Excise Duty (SAED) on petrol by ₹10 per litre.
- This reduction brought the SAED on petrol down to ₹3 per litre.
- The revised duty became effective from March 27, 2026.
Petrol And Diesel Tax In India
Petrol and diesel are currently outside the scope of the Goods and Services Tax (GST). Instead, they are taxed under a dual system comprising Central excise duty and State VAT/Sales Tax.
The final retail price of petrol and diesel is determined by four key components:
- Base Price: The cost of crude oil, including import, freight, refining, and distribution expenses.
- Central Excise Duty: A fixed tax imposed uniformly by the Central Government.
- Dealer Commission: A fixed commission paid to fuel station dealers by Oil Marketing Companies (OMCs).
- State VAT/Sales Tax: A state-specific tax or cess that varies across states, leading to differences in fuel prices.
Central And State Tax On Petrol And Diesel In India
Both the Central and State Governments levy taxes on petrol and diesel. The Central Government imposes a fixed excise duty, while states charge VAT, sales tax, and other local cesses.
Since state tax rates differ, petrol and diesel prices vary across India. Recent revisions in central excise duty and periodic policy changes also influence retail fuel prices.
State Wise Tax on Petrol And Diesel In India
The table shows State-Wise tax on Petrol and Diesel In India:
| State / Union Territory | Petrol Sales Tax / VAT | Diesel Sales Tax / VAT |
| Andaman & Nicobar Islands | 1% | 1% |
| Andhra Pradesh | 31% VAT + ₹4/litre VAT + ₹1/litre Road Cess | 22.25% VAT + ₹4/litre VAT + ₹1/litre Road Cess |
| Arunachal Pradesh | 14.50% | 7.00% |
| Assam | 24.77% or ₹18.80/litre (whichever is higher) | 22.19% or ₹14.60/litre (whichever is higher) |
| Bihar | 23.58% or ₹16.65/litre (whichever is higher) + 30% surcharge | 16.37% or ₹12.33/litre (whichever is higher) + 30% surcharge |
| Chandigarh | ₹10/KL cess + 15.24% or ₹12.42/litre (whichever is higher) | ₹10/KL cess + 6.66% or ₹5.07/litre (whichever is higher) |
| Chhattisgarh | 24% VAT + ₹2/litre VAT | 23% VAT + ₹1/litre VAT |
| Dadra & Nagar Haveli and Daman & Diu | 12.75% VAT | 13.50% VAT |
| Delhi | 19.40% VAT | ₹250/KL Air Ambience Charges + 16.75% VAT |
| Goa | 21.5% VAT + 0.5% Green Cess | 17.5% VAT + 0.5% Green Cess |
| Gujarat | 13.7% VAT + 4% Town Cess | 14.9% VAT + 4% Town Cess |
| Haryana | 18.20% or ₹14.50/litre (whichever is higher) + 5% additional tax | 16.00% or ₹11.86/litre (whichever is higher) + 5% additional tax |
| Himachal Pradesh | 17.5% or ₹13.50/litre (whichever is higher) | 13.90% or ₹10.40/litre (whichever is higher) |
| Jammu & Kashmir | 24% MST + ₹2/litre Employment Cess | 16% MST + ₹1/litre Employment Cess |
| Jharkhand | 22% or ₹17.00/litre (whichever is higher) + ₹1/litre Cess | 22% or ₹12.50/litre (whichever is higher) + ₹1/litre Cess |
| Karnataka | 29.84% Sales Tax | 21.17% Sales Tax |
| Kerala | 30.08% Sales Tax + ₹1/litre Additional Tax + 1% Cess + ₹2 Social Security Cess | 22.76% Sales Tax + ₹1/litre Additional Tax + 1% Cess + ₹2 Social Security Cess |
| Madhya Pradesh | 29% VAT + ₹2.5/litre VAT + 1% Cess | 19% VAT + ₹1.5/litre VAT + 1% Cess |
| Maharashtra (Mumbai, Thane & region) | 25% VAT + ₹5.12/litre Additional Tax | 21% VAT |
| Odisha | 28% VAT | 24% VAT |
| Punjab | ₹2,050/KL Cess + Urban & Infrastructure Cesses + 16.58% VAT | ₹1,050/KL Cess + Urban & Infrastructure Cesses + 13.1% VAT |
| Rajasthan | 29.04% VAT + ₹1,500/KL Road Development Cess | 17.30% VAT + ₹1,750/KL Road Development Cess |
| Tamil Nadu | 13% + ₹11.52/litre | 11% + ₹9.62/litre |
| Telangana | 35.20% VAT | 27% VAT |
| Uttar Pradesh | 19.36% or ₹14.85/litre (whichever is higher) | 17.08% or ₹10.41/litre (whichever is higher) |
| West Bengal | 25% or ₹13.12/litre (whichever is higher) + ₹1,000/KL Cess | 17% or ₹7.70/litre (whichever is higher) + ₹1,000/KL Cess |
Petrol And Diesel Tax Breakup
The final retail price of petrol is calculated by adding dealer commission, central excise duty, and state VAT to the pre-tax dealer price.
| Price Component | Amount |
| Pre-Tax Dealer Price (Base + Refining + Freight) | ₹76.00–₹79.00/litre |
| Dealer Commission | ₹4.00–₹4.50/litre |
| Central Excise Duty | ₹11.90/litre |
| Delhi VAT (19.40%) | ₹17.00–₹19.00/litre |
| Final Retail Selling Price (RSP) | ₹102.12/litre |
Petrol and Diesel Price Without Tax
| Price Build-Up Elements | Petrol (₹/litre) | Diesel (₹/litre) |
| Crude Oil Cost (Landed Cost + Import Blending) | ₹58.00–₹62.00 | ₹55.00–₹59.00 |
| OMC Processing Cost (Refining, Logistics & Margin) | ₹12.00–₹15.00 | ₹11.00–₹14.00 |
| Operational Inflation Buffer (Marketing & Contingencies) | ₹8.00–₹10.00 | ₹7.00–₹9.00 |
| Price Chargeable to Dealers (Pre-Tax Total) | ₹76.00–₹79.00 | ₹73.00–₹77.00 |
Final Word
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.
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