Robbery in Daylight !!!!!!
Those of you who thought robbery was committed by desperate thieves who would stop at nothing to cut your throat for a few paisas rather than by the upright men and women who staff the revenue and excise departments – had better think again.
The government is currently putting its hand in your pocket every time you refuel your vehicle, and no, it’s not the GST which you know you are paying, it’s the other costs that are discreetly woven into the fabric of taxation in such a way as to be largely invisible to the naked eye. The government in a show of what it claims to be transparency has revealed for the first time the formula by which taxes on POL products are determined. Complicated it is, but transparent it is not.
An analysis published in this newspaper on reveals a range of anomalies in the pricing formula. Most glaringly, the government is ‘fattening up’ GST by imposing it after other charges like the Inland Freight Equalisation Margin (IEFM), oil marking companies’ (OMCs) margins, and dealers’ commission margins have been added; rather than imposing it on the basic import landing cost. If we look at the price of oil at the point of entry between June 29 and 17 July, then the landed cost of petrol comes to Rs34.39 per litre. If GST at the standard rate was applied to this cost then it would come to Rs5.50 per litre – which should make the ‘price at the pump’ Rs39.89 per litre. Which of course it isn’t. Why it isn’t is because the government is artificially inflating the price of petrol to Rs51.37 per litre by first levying the IFEM of Rs3.56 per litre, OMCs’ margin of Rs1.52 per litre and dealers’ margin of Rs1.90 per litre. GST is then calculated on the inflated figure at a rate of Rs8.22 – which is a very neat trick if you can pull it off.
Effectively, petrol consumers are paying taxes on taxes which have already been levied, and the net result is calculated to earn the government an additional Rs2.72 on every litre of petrol sold at the pumps. You do not have to be a financial genius to see that this puts a lot of money in the pocket of the government, but you would not have known of this piece of fiscal chicanery had not somebody gone digging with calculator in hand. Other anomalies are also exposed :- a similar trick is pulled with kerosene which means the government pockets an extra Rs2.52 per litre; and on high speed diesel giving them a healthy Rs2.12 per litre. There is nothing transparent, equitable or fair (as in fair to the consumer) about any of this. Attempting to pass off the revelation of the POL pricing formula as an exercise in openness and good governance is disingenuous at best and downright dishonest at worst. We accept that taxes have to be paid – death and taxation being the only things we can be sure of in life – but we should be able to see and understand them for what they are. Drive safely and watch out for robbers, because these days they come in many guises.
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