After Delhi government increased the VAT on fuels the other day, the excise duty has been hiked by Central Government. Petrol and diesel are growing expensive day by day. This is being down to strengthen the revenue losses incurred due to the COVID-19 outbreak. The government wants a speedy recovery of money but would it be a fair decision to start with such big jumps in the fuel prices? Let’s find out.
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The Central Government just announced an excise duty of Rs. 10 and Rs. 13 on petrol and diesel fuels respectively. The Central Board of Indirect Taxes and Customs rolled out a notification yesterday which marked the excise duty hike of Rs.2 and Rs.5 per litre for both petrol and diesel respectively. Additionally, the ‘Road and Infrastructure Cess’ has been revised. This one has been hiked by Rs.8 per litre for both petrol and diesel. The change in the excise duty however, does not affect the price at which we get these fuels!
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The excise duty hike on petrol and diesel has been done to take a possible advantage of the falling international crude oil prices. The change in the excise duty is projected to generate and additional income of Rs. 16 Lakh Crore for the Central Government of India. Crude oil prices have dropped o the lowest ever worldwide but the Indian consumer will continue to pay the same amount for the fuel with a larger part of it now being paid as the tax to the government. Anyhow, we need to pay the same price as this time, the international price drop benefit hasn’t been passed on to the consumers keeping in mind the current situation of the economy.
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The excise duty hike is expected to help the government in gaining back a good revenue but the demand still remains low due to the ongoing lockdown. Let’s see what happens!
