Due to an increase in the prices of petrol and diesel, the state governments will reap a windfall gain of about Rs 227 billion this fiscal, claimed State Bank of India’s Economic Research Wing. Currently, fuel is under a dual taxation regime. The Centre levies excise duty at specific rates- Rs 19.48 for petrol and Rs 15.33 for diesel. The states impose sales tax or VAT ad valorem, while some states also collect a cess. The sales tax on petrol varies from 6 per cent in the Andaman and Nicobar Islands to 39.12 per cent in Mumbai, Thane and Navi Mumbai areas. Similarly, the sales tax on diesel ranges between 6 per cent in Andaman and Nicobar Islands to 28.08 per cent in Andhra Pradesh.
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