State government increased the tax rates for fuels


The government of Karnataka citing the adverse impact on the state revenue collection as the prices of crude oil in international market is continuously falling, increased the tax on petrol and diesel to 32 percent and 21 percent. The tax rates on petrol and diesel were 28.75 percent and 17.73 percent respectively before the tax revision.

The new rates for petrol and diesel after revision are Rs 70.84 per litre and Rs 64.66 per litre, respectively. Even after the revision in the price of the fuels in State, it is lower than other neighboring  states, considering the base price of the fuels on January 1, 2019.

The Chief Minister’s office said in a statement that the state revenue was adversely affected due to continuous fall in the prices of crude oil in international market since two and a half months resulting into the base price of the fuels dropping substantially.

It is also believed that from July 15, 2018, there was additional collection of 1.14 and Rs 1.12 per litre on petrol and disel, respectively due to the increase in tax rate from 30 to 32 percent and from 19 to 221 percent.

To give relief to the consumers the government has lowered the tax on petrol and diesel by Rs 2 per litre from September 17 last year, considering the substantial increase in the base price of the fuels

“Accordingly, the tax rate on petrol and diesel came down from 32 per cent to 28.75 per cent and from 21 per cent to 17. 73 per cent, respectively.”

With effect from October 5, 2018, the Union government also reduced the central excise duty on petrol and diesel by Rs 1.5 per litre and also directed Oil Marketing Companies to cut petrol and diesel prices by Rs 1 per litre out of their own margin, the statement added.

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