BackAs petrol, diesel prices soar, Centre's Apr-Jun excise mop-up at Rs94,181 crore
There is a growing clamour for the Centre to cut fuel taxes, but such a move is unlikely to have a significant impact on retail inflation because of its low weightage in the index
PremiumNEW DELHI: The Union government has collected around Rs94,181 crore in central excise duties on petrol and diesel sales from April to June this year amid a surge in fuel prices.
This information on central excise duty collection was provided to the Lok Sabha on Monday by minister of state in finance ministry Pankaj Choudhary.
The average share of central excise duty on petroleum products is 12% in the gross revenue collection for the period 2017-18 to 2020-21. Central excise duty collected from petroleum products for 2018-19, 2019-20 and 2020-21 was Rs2.35 trillion, Rs1.97 trillion and Rs3.44 trillion respectively.
In a response to a question, Choudhary said, “The excise duty rates have been calibrated to generate resources for infrastructure and other developmental items of expenditure keeping in view the prevailing fiscal situation."
While there is a growing clamour for the Centre to cut fuel taxes, it seems unlikely to happen. In an earlier interview to Mint, Krishnamurthy Subramanian, chief economic adviser to the finance ministry, had said that a cut in fuel taxes is unlikely to have a significant impact on retail inflation because of its low weightage in the index.
“The impact of increase in prices of petrol and diesel can be seen in their impact on inflationary trend measured by Wholesale Price Index (WPI). The weightage of petrol and diesel in the WPI index is 1.60% and 3.10% respectively and in the CPI index is 2.19% and 0.15% respectively," minister of state in petroleum and natural gas ministry Rameswar Teli said in response to another question in Lok Sabha on Friday.
The Union government on Friday clarified that there was no proposal to bring oil and gas under the Goods and Services Tax (GST). Such a recommendation can only be made by the federal indirect tax body - the GST Council.
The Centre’s excessive taxation on transportation fuel “amounts to an indirect infringement of the taxation rights of states and is curtailing their ability to spend on health, administration and justice delivery," Kerala finance minister K.N. Balagopal had said in an interview to Mint.
The Union government is levying a big part of the central excise duty on auto fuels as cess, which is not being shared with state governments, the minister had said.
India is the world’s third-largest oil importer and the fourth-largest buyer of liquefied natural gas (LNG) and is particularly vulnerable to increases in global prices as they affect the country's import bill, stoke inflation and widen trade deficit. Following the covid outbreak, crude prices for Indian basket of crude had plunged to $19.90 in April last year before recovering to $71.98 a barrel in June, data from the Petroleum Planning and Analysis Cell showed.
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