Today's Diesel Price in Kolkata

The basic cost of fuel after refining remains the same for both petrol and diesel; however, the excise duty levied by the Centre and the VAT levied by the West Bengal Government is different. While petrol attracts excise duty of 25% or Rs.13.12 per litre, whichever is higher, diesel is charged 17% or Rs.7.70 per litre. This variation in tax structure makes diesel cheaper than petrol.

Why Diesel is not under GST?

The new taxation system known as the Goods and Service Tax (GST) was introduced by the Central government from July 2017. However, five petroleum products such as petrol and diesel, natural gas, crude, and aviation turbine fuel (ATF) have been exempted from GST. Both the Centre and states are not in favour of implementing GST on fuel as there could be an impact on their respective revenue collection. The Centre could lose as much as Rs.20,000 crore input tax credit in earnings through excise duty, while states are apprehensive about affecting their revenue pool to meet any contingencies.

The total tax incidence under the current tax regime of excise duty and VAT comes around 45-50% and 35-40% petrol and diesel respectively. Under the GST, the total tax incidence is 28%, impacting the revenue earned by both. The GST is an ad valorem charge, levied as a percentage on the ex-factory price, which could have a huge influence on retail prices whenever refinery gate prices are increased due to the incline in crude oil prices in the international and vice versa.

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