The Indian Govt has hiked the excise duty on petrol by a record INR 10 per litre. The excise duty on diesel has also been increased by INR 13 per litre. The retail prices of the fuels will not be affected by this move, though.
The Central Board of Indirect Taxes and Customs has issued a notification which states that the special additional excise duty on petrol has been hiked by INR 2 per litre and road cess has been increased by INR 8 per litre. In case of diesel, special additional excise duty has been hiked by INR 5 per litre and road cess has been raised by INR 8 per litre. As a result, the total incidence of excise duty on petrol has grown to INR 32.98 per litre and INR 31.83 per litre in case of diesel.
The hike of the excise duty won’t impact the retail prices of the fuels as state-owned oil firms will adjust them against the recent fall in oil prices, industry officials said. While this will allow people to buy fuel at the existing rates, it will also rob them from the benefits that they could have received by plummeting international oil prices.
Government sources said that the Centre has taken this step of increasing duty to raise some revenue given a tight fiscal situation. This would help in generating the resources to meet the expense of coronavirus fight. With the hike in the excise duty on petrol and diesel, the Government is expecting to garner INR 1.6 lakh crore as additional revenue.
This is the second time since March that the Indian Government has increased the excise duty on petrol and diesel to mop up gains arising from fall in international oil prices. It had raised excise duty on petrol and diesel by INR 3 per litre each in March to earn about INR 39,000 crore.