The government increased the excise duty on petrol by a record Rs. 10 per litre and Rs. 13 per litre on diesel. The centre took this step to raise some revenue to ease out the tight fiscal situation.
According to a report in PTI, the government has increased the excise duty on petrol by a record ₹ 10 per litre and ₹ 13 per litre on diesel. As per industry officials, the retail fuel prices will not be affected by the tax changes as state-owned oil firms will adjust them against the recent fall in oil prices. The report also mentioned that this step of increasing excise duty was taken by the centre to raise some revenue to ease the tight fiscal situation. This would aid in generating resources to meet the expenses to fight the Coronavirus Pandemic.
The Central Board of Indirect Taxes and Customs issued a notification mentioning a special additional excise duty on petrol has been increased by ₹ 2 per litre and road cess has been hiked by ₹ 8 per litre. For diesel, the special additional excise duty and road cess are hiked by ₹ 5 per litre and ₹ 8 per litre respectively. With new taxes, the total excise duty on petrol and diesel has risen to ₹ 32.98 per litre and ₹ 31.83 per litre respectively.
This is the second instance since March that the Indian government has increased the excise duty on petrol and diesel to mop up gains arising from the fall in oil prices in the international market. For starters, the government raised excise duty by ₹ 3 per litre on petrol and diesel in March to garner around ₹ 39,000 crore.
Interestingly, the fuel prices in India have not been revised since March 16 despite the fall in international oil prices that have come two-decade low. The gains will now be adjusted against the excise duty hike. Currently, petrol is priced at ₹ 71.26 per litre in Delhi whereas diesel costs ₹ 69.39. Additionally, the government had revised the excise duty on petrol and diesel on nine instances between 2014 and January 2016 taking away all the gains from the plummeting global oil prices.