Excise duty on petrol, diesel increased!
Tuesday will go down in history books as the day of costliest petrol and diesel across the country. That after several state governments and the central government hiked taxes in Petrol and Diesel.
Taxes such as VAT and Excise duty have been increased on unusually lower global oil prices. This has meant that petrol and diesel is selling for a pittance in the world, but in India, buyers will have to whip up an additional sum.
On Tuesday, the government raised excise duties on petrol by Rs 10 per litre and diesel by 13 per litre - that has the potential to raise the retail price of the two petroleum products between Rs 10-15 per litre depending on the taxation structure in different states.
The government has raised the additional excise duty in the form of road cess on petrol and diesel by Rs 8 per litre.
It has also raised special additional excise duty on petrol by Rs 2 per litre and diesel by Rs 5 per litre. The centre would, however, get a tax bonanza and gain in excess of Rs 1,75,000 crore for full year.
As per a notification issued by Central Board of Indirect Taxes and Customs, the new rates will be effective from May 6.
The increased excise rates on petrol and diesel is double blow for fuel customers, especially for states such as Delhi where the state government raised VAT on the two products to 30 per cent raising its retail price by Rs 1.67 per litre in case of petrol and about rs 7.1 per litre in case of diesel.
A hike in Petrol and Diesel may appear like a crude-joke to those wondering about the concept of a welfare state. However, readers should also note that several state governments have been complaining of a drying of revenue and therefore states have no way except hiking taxes on Petrol, Diesel, Liquor and other non-food non-essential categories.
A latest report also says that the hike in fuel excise could add nearly $21 billion.
The report is only optimistic considering it does not explain how the state of a strict lockdown could see more commoners coming to the petrol pump. In the days of the lockdown only essential good suppliers will require petrol/diesel and hence there is a likelihood that increase in petrol fares could hit cost of essential goods such as vegetables and even medicine.
However the thought of seeing a growth in revenue coffers has not dissuaded state governments such as Tamil Nadu from planning a Rs 2,500 crore mop-up. That, just by hiking tax on petrol and diesel.
States like Haryana and Tamil Nadu have also raised VAT on petrol and diesel and have looked at revenue from liquor segment while other states like Maharashtra, Karnataka and West Bengal had hiked VAT from April 1 itself. Since March 16, state-run oil marketing companies have not increased the basic retail selling price of petrol and diesel. Read the detailed report on fuel fares here.
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Cartoonist: Satish Acharya
Text: Sify Finance Desk