Petrol and diesel price was hiked again on Sunday by 35 paise a litre.
With this hike Petrol price in Rajasthan Sri Ganganagar stands at ₹117.86 per litre, while diesel costs ₹105.95 per litre.
With fuel prices hitting all-time high more regularly than ever, the rates now have reached a level where it actually costs more than 35 per cent of aviation turbine fuel or ATF which is used to fly aircrafts and helicopters has created ripples in social media circles
This made bloggers ridducle union government led by Modi and many posts saying in india now flying planes is cheaper than driving a car in India, thanks to the recent hikes in petrol and diesel prices across the country.
The ATF price, despite being hiked recently, remains much less than what petrol and diesel prices are.
For reference, a litre of ATF costs just ₹79 per litre in Delhi, while petrol costs ₹105.84 for the same amount and diesel comes for ₹94.57.
The reason behind ATF price being lower than that of petrol and diesel is the way tax on these fuels are calculated.
Just like the conventional vehicle fuels, ATF too attracts both central and state taxes, and it varies from state to state due to different VAT rates.
The ATF attracts central excise of 11 per cent, while VAT rates vary between zero to 30 per cent.
The VAT on ATF is highest in Gujarat at 30 per cent, 29 per cent in Tamil Nadu and Bihar, 28 per cent in Karnataka.
It is important to note Union government has urged all states to reduce VAT on ATF to not more than 4 per cent to reduce burden on airlines. Even at the highest possible price, the tax on ATF is not even half of the overall rate.
Compared to jet fuel, petrol and diesel price attracts a heavier tax structure.
The union and state government taxes contribute nearly 60% of the petrol retail price and 54% of the diesel retail rate.
Currently, the Centre levies excise duties of ₹32.80 per litre on petrol and ₹31.80 on diesel. Cess means that collected amount reatained by union and not shares to states.
Besides the central government imposed excise duty and freight charges, the motor fuels also attract variable VAT amounts from different state governments and dealer commissions as well.
There have been efforts to bring both ATF as well as petrol and diesel under the GST regime.
The move may help to substantially reduce taxes on fuel in coming days is not true says tax experts .
Because Gas cyclinder that is under GST also sky rocketed in recent times and touching 1000 Rs per cyclinder compare to what it was sold 600 Rs / cyclinder a year back