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NEW DELHI: The Centre stepped in to shield consumers and oil companies from the impact of high crude prices — which have surged 62% this month over Feb for Indian refiners — and slashed excise duty, a move that will leave a Rs 1.3 lakh crore hole for the exchequer.With fuel retailers, including IndianOil, Hindustan Petroleum and Bharat Petroleum, losing around Rs 24 on every litre of petrol and Rs 30 on a litre of diesel sold by them, govt cut special additional excise duty on both the auto fuels by Rs 10 each. At the same time, it imposed an export duty of Rs 21.5 a litre on diesel and Rs 29.5 a litre on aviation turbine fuel (ATF) in a bid to check windfall gains as fuel is in short supply in international markets after China imposed export curbs.
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The windfall tax will also help the Centre partly offset the impact of the excise duty cut. Central Board of Indirect Taxes and Customs chairman Vivek Chaturvedi said the windfall tax on exports will result in a gain of about Rs 1,500 crore in the first fortnight while the govt will have to forgo over Rs 7,000 crore in revenue because of the excise duty cut. He said the export tax will be reviewed fortnightly.
Govt Imposes Tax On Exports Of ATF, Diesel To Check Windfall Gains
Govt will have to forgo over Rs 7,000 crore revenue over duty cutThe windfall tax will help the Centre partly offset the impact of the excise duty cut. The govt will have to forgo more than Rs 7,000 crore in revenue because of the excise duty cut.Chaturvedi said the export tax will be reviewed fortnightly, as was the case in 2022, to align the duty with prevailing rates. The levy will not be applicable on fuel exported by public sector oil companies to Nepal, Bhutan, Bangladesh, and Sri Lanka. It will also not apply to ATF supplied to foreign-going aircraft.“In view of the ongoing and evolving situation in West Asia, our govt has resolved to provide relief in the form of a significant reduction in excise duties on petroleum and diesel so as to ensure stable prices… Going forward, we will continue to ramp up our efforts in mobilising additional non-tax revenues, and our govt will remain on its toes to carefully manage the country’s fiscal position,” finance minister Nirmala Sitharaman said in Rajya Sabha. The spike in global energy prices has resulted in the average cost of crude for Indian refiners rising from $69 in Feb to $111.93 so far in March. While most countries have increased pump prices, Indian refiners were taking a hit after raking in profits for several months.“Govt has taken a huge hit on its taxation revenues to ensure very high losses of oil companies at this time of sky-high international prices are reduced. Export tax has been levied as international prices have skyrocketed and any refinery exporting to foreign nations will have to pay export tax,” petroleum minister Hardeep Puri said on X.People-centric governance, says Amit ShahBJP and its allies on Friday lauded govt’s decision to slash excise duty on petrol and diesel to absorb their rising input costs as homeminister Amit Shah said it underscored “people-centric governance and sensitivity-led decision-making”.While the world is reeling under fuel shortages due to the West Asia conflict, driving up their prices globally, the decision of the govt headed by PM Narendra Modi brings much-needed relief to citizens, Shah said. Defence minister Rajnath Singh called it a timelyand decisive step, noting that it has come amid rising fuel prices across many countries.“This move underscores our govt’s proactive approach and a steadfast commitment to public welfare,” he said.It’s a subterfuge till assembly polls: CongressRaising questions about the Centre’s decision to reduce excise duty on petrol and diesel, Congress Friday said Modi govt did not reduce the oil prices when the global crude was low for many years, warning that it was only a subterfuge till the assembly elections.Congress general secretary Jairam Ramesh said, “When global crude oil prices fell as they did on seven different occasions in the past 12 years, consumer prices in India were not reduced. Today’s announcement was because of assembly elections. Wait till April 30th.”Party MP Manish Tewari said the govt revenue comes from people who pay taxes, and the ministers are not paying money from their own pocket to reduce the petrol price, as “petroleum minister Hardeep Puri is trying to pretend”.AICC spokesman Pawan Khera said the govt has been making money from cheap crude for the last 12 years by not reducing the price of petrol and diesel. Go to Source
