The government will look to reduce petrol and diesel prices by cutting taxes at the right time, said on Tuesday, the head of the agency is responsible for excise and other indirect tax collection. In fiscal year ended March 31, (2020-21) the record excise duty for petrol and diesel contributed to an increase of over 59% in indirect tax collections, in relation to the previous year. The Central Board of Indirect Taxes and Customs (CBIC) Chairman M Ajit Kumar said in his video call to the journalists to provide tax collection numbers, “We are very hopeful of very strong revenues over the next months.” “It’s a matter that is being examined continuously with regard to the reduction of the fuel price, and I am as sure that the time will come,” he said.
He was questioned whether the government intended to reduce excise duties on petrol and diesel in order to relieve consumers. He did not, however explained the schedule. Last year, petroleum excise duties were increased by Rs 13 a litre, and diesel by Rs 16. Petroleum excision currently amounts to Rs 32. The diesel excise duty amounts to Rs 31.80 and represents 39 percent of the Rs 80,87 retail selling price. Taxes represent 55-60% of the price that consumers pay in combination with State VAT. In some places in Rajasthan, Maharashtra and Madhya Pradesh the prices of oil crossed Rs 100-mark in February with international oil rising. As soon as elections were announced for five states including Western Bengal, Tamil Nadu and Kerala, prices capped. And they decreased a little when world prices were hit by concerns over the rebound in demand in the wake of Covid’s resurgence. Petrol hit an all-time high in February of Rs 91.17 a litre in Delhi, and diesel touched a Rs 81.47 of price per litre. The 59.2 per cent increase in excise collection is partly “explained by the increase in tax rates” in the opinion of CBIC member (budget) Vivek Johri. “When a cut is made that will affect excise income collection,” he said. In addition, corona virus infection has declined as the states imposed partial lockdowns. “Covid has reported a decline in consumption, especially in diesel, motor spirits (petroleum), and other fuels, in recent years. In the event of a change in rates and the consumption level we observe in the economy, then revenue will depend on where the rates settle “he said.
Last month Dharmendra Pradhan, Oil Minister told Parliament that the tax on petroleum and diesel in 2013 was Rs 52,537 crore which increased to Rs 2.13 lakh crore in 2019-20 and continued to swell to Rs 2.94 lakh crore in the first 11 months of the financial year 2020-21. For 2020-21 the CBIC did not allocate a separate tax on petrol and diesel.
