The Rs 3.14-per litre petrol price hike on Thursday may have hit the consumers hard, but the state government certainly has reasons to smile with an additional amount of Rs 89 crore expected to be deposited in its kitty by way of increase in VAT collections.
A senior official from the finance department said the government was expected to get an additional Rs 89 crore. The state government charges 26 per cent VAT and an additional tax of Re 1 per litre on petrol sold in Mumbai, Thane and Navi Mumbai municipal corporation areas, while the rest of the state has a tax rate of 25 per cent. The government plans to mop up Rs 51,829 crore as VAT collections in this fiscal, but the amount is expected to be whittled down to around Rs 46,000 crore after refunds. Of the total VAT collections, the target for collections on tax on motor spirits is expected to be a major chunk at Rs 10,857 crore.
Diesel accounts for the largest chunk of the money collected through tax on motor fuels, followed by petrol and aviation turbine fuel (ATF). VAT is charged at a rate of 24 per cent on diesel sold in Mumbai, Thane and Navi Mumbai municipal areas, while it is 21 per cent in other areas of the state. ATF is charged at 25 per cent in Mumbai while the tax is less on ATF sold elsewhere in the state. There is no VAT on LPG in Maharashtra while kerosene sold in the public distribution system (PDS) is charged three per cent VAT.