If the state government forgoes the taxes on petroleum products, petrol will be cheaper by Rs 17 and diesel will be cheaper by Rs 11 in Kerala. Thiruvananthapuram: The Kerala government has ruled out a cut to the state’s share of taxes on petrol and diesel. The state will have to forego Rs 1,336 crore a year if it reduces tax by 5 per cent and the loss would throw the state’s finances off balance, the government has written to the center in response to a directive to cut the value-added tax on petroleum products.
Maharashtra, Gujarat, Haryana, Punjab and Himachal Pradesh have cut the value-added tax on petroleum products after the central government trimmed Rs 2 per liter from an earlier fuel price increase.
Kerala gets 24.52 per cent of diesel price and 31.8 per cent of petrol price as tax. The state has also imposed a cess equal to 1 per cent of the central tax.
If the state government forgoes the taxes on petroleum products, petrol will be cheaper by Rs 17 and diesel will be cheaper by Rs 11 in Kerala. The previous United Democratic Front government had slashed taxes when the then Union government raised prices.
Petroleum products are the largest revenue generator in Kerala after the GST share and revenue from alcohol sales. The state received Rs 600 crore as fuel tax in October. The share was Rs 623 crore in September, Rs 548 crore in August and Rs 537 crore in July.
The tax structure (data from October 3)
Total tax on petrol per liter - Rs 39.42
Central tax - Rs 21.48, state tax - Rs 17.94.
Total tax on diesel per liter - Rs 29.78
Central tax - Rs 17.33, state tax - Rs 12.45.
The price matrix
Price of imported crude oil - $48 per barrel
Transport cost - $2
Total price - $50 (Rs 3,210)
Price per liter of crude - Rs 20.19
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