Delhi High Court to hear petition against rising fuel prices today


A public interest litigation (PIL) seeking the sale of petrol and diesel at reasonable prices instead of letting oil companies increase the rates exorbitantly was filed in the Delhi high court on Tuesday.

Meanwhile, Congress-led group of Opposition parties have called for Bharat Bandh today against the rising fuel prices.

Once GST is in and also has included petroleum products, it does not make sense to continue to multiple taxes which only adds to cascading effects on the cost of products, said Rohit Jain, Partner Economic Laws Practice. The Central government imposes excise duty worth Rs 19.48 and Rs 15.33 on petrol and diesel prices per litre respectively.

The tax ratio can be raised not by increasing rates but by bringing evaders and non-filers in tax net. He explained that once tax revenue from direct taxes (income tax) and non-oil indirect taxes go up, there will be a possibility of cutting taxes on oil. "2008-2014, it was static", he said.

In countries which are tax compliant, oil is taxed at a rate which is less than that in India.

While elaborating reasons behind this nation level high prices of petrol in city, Amol Bhedsurkar, president of the association said: "Higher transportation cost reflected into petrol prices.We have to collect petrol from Manmad depot, after that dealers have to pay toll and other charges which are responsible for highest fuel prices".

Giving an example, the official said if petrol is at Rs 83, then Rs 20 goes to states as taxes plus Rs 10 from Centre's devolution. It means GST will be levied at a rate which is close to the sum of Central and States' levies during pre-GST regime so that no one loses revenue. So states get Rs 30 out of Rs 42 collected as taxes. A litre of petrol in the national capital now costs Rs 80.87, while it is Rs 88.26 in Mumbai.

Value-Added Tax paid by consumers on final retail price is the highest for petrol in Mumbai at 39.12 percent and for diesel in Telangana at 26 percent. "Inflation was 4.1 per cent in Vajpayee government, 5.8 per cent in UPA-1, 10.4 per cent in UPA-2 and in current NDA around 4.5 per cent average".

Andhra Pradesh gets Rs 22.15 per litre on petrol and Rs 16.87 on diesel.