The government on Tuesday raised the excise duty on petrol by Rs 10 per litre and on diesel by Rs 13 per litre to manage the revenue collections at a time when the oil prices globally are low. The industry official said that the retails pricing of petrol and diesel will not get affected by the tax changes as the state-owned oil companies will adjust them according to the fall in prices.
Two separate notifications reveal that additional excise duty on petrol has been levied Rs 8 and special additional excise duty of Rs 2 will also be imposed making it to Rs 10 per litre. In the case of diesel, an additional excise duty of Rs 8 and special duty of Rs 5 per litre will be levied. In the past, the government also raised the pricing of the fuel to take advantage of the low oil prices. The official also revealed that the revenue generated will be used for development.
Since, petrol and diesel does not fall under GST, the states strategize to raise the value-added tax (VAT ) on fuels when they need higher revenues to match up with their needs. This won’t be wrong to say that the fall in global oil prices has opened a way for the central and the administrations to find resources especially when the economy is low.
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The price hike will be absorbed by Oil Marketing Companies leading to no increase in retail prices of fuel at the pump. https://t.co/lTTXEDfgfd
— ANI (@ANI) May 5, 2020
Reports reveal that the government has taken the step on raising the excise duty considering the tight fiscal situation of the country. No doubt, this is the only way to generate more resources and to meet the expenses made in the fight against coronavirus in the country.
