After the GST roll out on July 1’ 2017, the whole country is busy evaluating the effects of GST on various products and services they use frequently. While the prices of some have dropped like the products meant for masses for example soaps and oils, but the prices of some have increased like banking services, insurance, high end gadgets etc. One of the most commonly used product that every Indian is bothered about is the fuel and its prices.
The fuel price is one of the most fluctuating commodity price. Now, after GST, let us see how the petrol and diesel has been priced.
GST impact on Petrol and Diesel
The vehicle users need to cheer up as there is a good news for them. The prices of the fuel like diesel and petrol have been dropped as per the GST news. This price cut has happened because along with various indirect taxes like luxury tax, octroi, vat, service tax, etc. that have been subsumed with one simplified and unified tax structure of GST, the entry tax that the state government was imposing on the fuel making it costlier for the consumers has also been abolished in GST making the prices of the fuel drop.
This abolition of the entry tax has been in line with the new and current tax structure of GST which was rolled out all round the country on July 1 of this year making the drop in fuel prices ranging between ₹2.5 to ₹3.
Moreover, along with the abolition of entry tax, the sales tax which was being charged under the Sec 5 of the Karnataka Sales Tax Act, 1957, was also subsumed which has led to the further drop in the prices of the petrol and diesel for the state of Karnataka.
Even before the Goods and Services Tax (GST) was rolled out, the oil marketing companies had initiated a system of daily price change for the fuel or petrol and diesel. As of now, this system of daily price revision has been in the benefit of the vehicle users as the petrol prices have reduced by Rs. 2.4 per litre and the price of diesel has been reduced by Rs. 1.05 per litre.
This system of daily price revision was started on 16thJune. Initially the pilot was done only in five cities of Udaipur, Jamshedpur, Visakhapatnam, Chandigarh and Pondicherry. This new pricing system is better as the consumers can get immediate benefit after the changes in international crude oil prices. Since the global rates of crude oil prices have been reducing lately, hence the prices in India has alsoseen a drop.
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