It was a hot summer’s day and Motabhai was furiously pedalling his rickety bicycle cursing the OPEC under his breath when he spotted the upstart, Chotu, waving at him. I’m not giving him a lift now, he told himself.
So, what’s up Chotu?
Motabhai, surprising to see you on a cycle. And why’re you so sullen?
Don’t rub salt into my wound now, Chotu. You know what the price of petrol now is na?
Oh, that way... I thought you took to the cycle to shed some of that fat you carry on yourself.
Stop needling me now, will you? Modibhai is doing enough of that already...
Arrey, why do you blame Modibhai for everything. Petrol prices are high because crude oil price is rising daily...
Oh, stop talking like a bhakt now. I read in ‘BusinessLine’ the other day that petrol price is now higher than in 2014 even though crude oil prices are much lower than what they were then.
Not bad, Motu, I’m impressed.
Yeah, and I also know that Modibhai and our local CM are responsible for this
Spot on, Motu. Are you aware that Modibhai increased excise duty on petrol nine times between November 2014 and January 2016? And our local CM increased the VAT.
Is that right, Chotu?
Yes, and it was done cleverly without you realising it. As crude oil prices fell, Modibhai quietly appropriated the benefit as excise duty. The total increase was as much as ₹11.77 a litre of petrol and ₹13.47 a litre of diesel.
So, how much is the total tax that we now pay on petrol and diesel?
Hold your breath, Motabhai. Taxes, including excise duty and VAT, are about half of the ₹74 a litre that you pay for petrol and a little over third the price of diesel
So, Chotu, are you then saying that taxes account for 100 per cent of the refinery price of petrol?
Exactly, Motu. I think the hot sun has had a beneficial impact on your brain power... you seem to be more intelligent today.
I’ll ignore that wisecrack for now. Tell me, is that why they are not including petrol and diesel in GST?
Absolutely. Imagine, the highest tax in GST is 45 per cent and that is for the stuff that you often chew and spit, dirtying the streets. How can they justify charging 100 per cent for an essential product like petrol?
But Chotu, why can’t they charge 45 per cent GST on petrol?
Motabhai, now you’re talking business. How much do you think the Central and State governments earn from taxes on fuel?
A few thousand crores?
₹4.09-lakh crore. If that’s difficult to understand this is how much they earn — ₹4090000000000
Baap re, wait, let me count the number of zeros...
Oh, stop that now Motu and get serious. If you were earning that sum, will you agree to have it cut?
I’m tempted to say that I will agree to cut one zero because zero has no value but you’ll call me a dunce again...
Precisely, and I’m glad you’re learning. How do you think Modibhai and our CM will agree to bring petrol and diesel under GST?
You mean, Chotu, they’re all in it together? Irrespective of the party?
Yes, Motu, that’s the sad situation. Tell you what, I’ll join you in my bicycle from tomorrow. Pedal power is better than petrol power.