What state cess is added to the GST on fuel sold in Kozhikode?

Detailed Legal Analysis

In Kozhikode, the state cess added to the GST on fuel sold is primarily the Kerala State Cess, which is levied on both petroleum products and fuels. This cess is in addition to the Goods and Services Tax (GST) applicable on these products.

The taxation structure for fuel in Kerala consists of the following components:

• GST on Fuel: Fuel products are subject to GST, which is levied by the central government. The GST rate on petrol is typically 28%, while diesel is taxed at 18% under the GST regime.
• State Cess: The Kerala State Cess is charged on the sale of petroleum products. As per the Kerala State Cess Act, 2018, the state government has the authority to impose a cess on certain goods, including fuels, to generate revenue.
• Additional State Taxes: Besides the cess, the state may also impose additional taxes, such as Value Added Tax (VAT) on fuels, which can significantly increase the overall tax burden on fuel prices.

As of October 2023, the rates for the Kerala State Cess on fuels are as follows:

• Kerala State Cess on Petrol: The cess is currently set at INR 1 per liter.
• Kerala State Cess on Diesel: The cess is also INR 1 per liter.

This means that when consumers purchase fuel in Kozhikode, they are paying the combined taxes of GST and the Kerala State Cess, along with any applicable VAT. The total effective tax can vary based on local regulations and any changes made by the state government or central government in their respective tax structures.

Relevant laws governing these taxes include:

• Goods and Services Tax Act, 2017: Governs the imposition of GST on goods and services across India.
• Kerala State Cess Act, 2018: Provides the framework for levying cess on specific goods, including petroleum products.
• Kerala Value Added Tax Act, 2003: Governs the imposition of VAT on sales of goods, including fuels.

It is essential for consumers and businesses in Kozhikode to stay updated with any changes in these tax rates as they can impact fuel prices significantly.