Government tables notifications on excise duty, road cess rise on petrol, diesel in the parliament

Minister of State for Finance Anurag Singh Thakur on Monday tabled three notifications relating to increase in excise duty and road cess on petrol and diesel by Rs 3 per per litre, amidst uproar by opposition in Lok Sabha.

Thakur placed before the House the notifications dated March 13, 2020 seeking to raise special additional excise duty on petrol by Rs 2 to Rs 10 per litre in case of petrol and to Rs 4 per litre litre from Rs 2 in case of diesel. Additionally road and infrastructure cess was raised by Re 1 per litre on petrol and diesel to Rs 10.

Besides, another notification seeking to increase the Road and Infrastructure Cess (RIC), collected as additional duty of customs on both petrol and diesel from Rs 9 to Rs 10 per litre was also laid on the table.

Opposition members protested the government move. They questioned the hike in duty when global crude prices have come down significantly. Later in the day, Thakur also tabled the notifications along with the explanatory memorandum before Rajya Sabha.

This was opposed by AITC member Sukhendu Sekhar Ray. “The price of crude oil has come down substantially in the world market and price of diesel and petrol has been enhanced in our market along with road cess,” Ray said

With this, the total incidence of excise duty on petrol has risen to Rs 22.98 per litre and that on diesel to Rs 18.83. The tax on petrol was Rs 9.48 per litre when the Modi government took office in 2014 and that on diesel was Rs 3.56 a litre.

In all, duty on petrol rate was hiked by Rs 11.77 per litre and that on diesel by 13.47 a litre in those 15 months that helped the government to more than double the excise mop up to Rs 2,42,000 crore in 2016-17 from Rs 99,000 crore in 2014-15. It cut excise duty by Rs 2 in October 2017 and by Rs 1.50 a year later. But it raised excise duty by Rs 2 per litre in July 2019.

Benchmark crude oil prices have halved since January to $ 32 per barrel. In sync with this, the prices of petrol and diesel have also come down by more than Rs 6 per litre, from Rs 76.01 a litre on January 11, 2020 to Rs 69.87 a litre on March 14 for petrol, and from Rs 69.17 to Rs 62.58 for diesel during the same period in Delhi, PTI reports.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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