Movements to increase excise duty on petrol and diesel to fill empty government coffers

Mumbai, Ta. Monday, October 26, 2020

The government is likely to increase excise duty on petrol and diesel again to fill the coffers emptied by the corona. To alleviate the financial strain on the country's economy caused by the corona, the government will impose an excise duty of Rs 5-6 per liter on petrol and diesel, government sources said.

If such an increase is made, the government's coffers are estimated to generate an additional Rs 50,000 crore in an entire year. Discussions are underway to impose excise duty on petrol-diesel and this will be announced soon.

The government wants to ensure that the increase in excise duty does not lead to an increase in the retail price of both the products, as it could lead to inflationary pressures.

Global crude oil prices are currently hovering around ૪ 80 a barrel. Earlier in March, the government had sought parliamentary approval to levy an additional excise duty of Rs 18 per liter on petrol and Rs 15 per liter on diesel.

Thus, the government has the option to increase as per the approval of Parliament, the sources added.

If excise is increased, India will be the highest tax payer on petrol and diesel in the world. About 50 per cent of the retail price of these two products is taxable. The exchequer is expected to generate Rs 1.5 lakh crore in revenue this year.