The price of petrol touched Rs 88.26 a litre in Mumbai - an increase of Rs 0.14 a litre compared to Monday, reported ANI. Maharashtra emerged as the first state expressing a willingness to bring petroleum products under GST.
The VAT rates are as high as 39.12 per cent in Maharashtra on petrol, and Andhra Pradesh levies the highest VAT on diesel at 28.08 per cent. "Currently, taxes on petroleum are close to 100 per cent (of fuel price) and the government is looking at reducing it to 65-70 per cent", said Madan Sabnavis, Chief Economist, Care Ratings. The government would have to forego a tax revenue of Rs. 820 crore towards diesel, and Rs. 300 crore on petrol.
So, Naidu can claim credit for both the reductions saying that he had taken a decision and also forced the Centre to come down on its knees, since the public have been suffering due to steep raise of petrol and they resorted to staging protests across the State on Monday.
The official said every state collects Value-Added Tax and also gets 42 per cent of what Centre collects.
The official said consumers will have to pay for the fuel they use. "2007 was the only year when we saw an increase in tax-GDP ratio". Of this, 50 per cent is non-oil and 50 per cent is oil.
In countries, which are tax compliant, oil is taxed at a rate that is less than that in India. Because the price is built up by excessive taxes on petrol and diesel.
In the state capital, the IT campus at Technopark is functioning and the ISRO units are also working as normal. Petrol dealers said that for the last two weeks, fuel prices have been increasing continuously at least by 20 paise to 30 paise every day. In Mumbai, a litre of petrol costs Rs 87.77 and diesel comes for Rs 76.98, the notification said. In Hyderabad, petrol costs Rs 85.75 and diesel Rs 79.37. While fiscal deficit means expenditure higher than income, current account deficit (CAD) is the difference between inflow and outflow of foreign currency.