Excise receipts on petrol, diesel jump 40% till Oct in FY211 min read . Updated: 08 Dec 2020, 11:20 PM IST
Excise duty receipts stood at ₹1.6 trillion in Apr-Oct period, up from ₹1.14 trillion in the same period last year
The Centre’s receipts from excise duty, the bulk of which comes from petrol, diesel and crude oil, has shown a sharp 40% year-on-year jump in the first seven months of this fiscal, even as the pandemic and the economic recession brought down overall tax receipts by 16%.
The Centre’s receipts from excise duty stood at ₹1.6 trillion in the April-October period, markedly above the ₹1.14 trillion collected in the same period a year ago, data from the Controller General of Accounts showed.
In the same period, receipts from corporate tax, personal income tax, goods and service tax (GST) and the cess collected from items in the 28% GST bracket showed a contraction ranging from 17-37% from the year-ago levels. This reflected the loss of incomes and a demand slump in the economy.
The sharp fall in global oil prices earlier this year had given the government an unexpected revenue source, prompting increases in the taxes on petrol and diesel. Since March, the government had in two tranches raised the special additional excise duty and the additional excise duty on petrol and diesel collected as road and infrastructure cess, leading to an increase of ₹13 on petrol and ₹16 on diesel per litre.
The tax increases did not raise the retail price but denied the benefit of low global fuel prices to consumers. Oil prices have since clawed back, with economic activity picking up pace. Crude price, which was at a monthly average of $19.9 a barrel in April, traded around $48 a barrel on Monday.
The elevated level of energy taxes during a recession while policy makers are attempting a manufacturing-led recovery indicates the limited alternative revenue-raising means available to the government. Overall tax receipts have stayed below year-ago levels and stake sales in state-run companies have not taken off during the pandemic. As such, the Centre has re-prioritized its spending for the current year and scaled up borrowing.
Petrol costs ₹83-90 a litre in metro cities and diesel ₹73-80 a litre. India follows a market-linked pricing regime called trade parity pricing for petrol and diesel and there is no subsidy.