Diesel price is a hot topic in today’s era. Diesel prices from the last few months are soaring high in the national capital, Delhi. However, the Chief Minister of Delhi, Arvind Kejriwal, today announced a reduction in the price of the diesel.
The change in price is due to the reduction in the Value Added Tax (VAT). The VAT on diesel reduced from 30% to around 16.75%. The Cabinet decided to lower the VAT rate in Delhi.
The price of the diesel to be cheaper by around ₹8 from Thursday morning, the CM added. A reduction in VAT is also an initiative to help Delhi boost its economy.
The price of any fuel is determined on the basis of the price of the crude oil as well as the forex. However, the state levy different taxes on it.
In short, taxes applied are in the following manner:
Basic cost+Excise Duty+VAT+Dealer’s Commission=Amount paid by the customer for the fuel.
Now, the price of diesel in Delhi will cost around ₹73.64. Earlier, it used to be around ₹81.94, even higher than the price of petrol in Delhi that costs ₹80.43 currently.
Reduction in VAT to result in a price drop of diesel in Delhi.