Irregular fuel tax levy results in Rs 1,893 crore loss

Irregular fuel tax levy results in Rs 1,893 crore loss

The finance department has failed to levy tax on second point of sale of fuel, due to which the government lost additional revenue of Rs 645 crore. Further, the authorities overlooking the conditions governing grant of exemption and applicability of reduced rate of tax too resulted in a shortage of revenue of Rs 1,247.57 crore, the CAG has pointed out in its report.

“The commission paid to dealers of fuel is not included in the calculation of value added tax. Between 2013-14 and 2014-15, the commission paid to dealers were in the range of Rs 1.09 to Rs 2.04 per litre. The oil companies had affected sale of 1.96 crore kilolitres of petrol and diesel and the commission works out to Rs 2,695.68 crore,” said the report.

In Haryana and Delhi, the VAT acts does not restrict the levy of tax on petrol and diesel without including dealers’ commission. “Similar approach in Tamil Nadu could have resulted in realisation of additional revenue of Rs 645.35 crore by way of tax on dealers’ commission,” said the report.  Read More

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