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

Minister of State for Finance Anurag Singh Thakur placed before the House the notifications seeking to raise additional excise duty on petrol by ₹2 to ₹8 per litre for petrol and to ₹4 per litre litre from ₹2 for diesel.

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

Mr. Thakur placed before the House the notifications dated March 13, 2020 seeking to raise special additional excise duty on petrol by ₹2 to ₹8 per litre in case of petrol and to ₹4 per litre litre from ₹2 in case of diesel.

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Additionally road and infrastructure cess was raised by ₹1 per litre on petrol and diesel to ₹10.

Opposition members protested the government move. They questioned the hike in duty when global crude prices have come down significantly. Later in the day, Mr. 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,” Mr. Ray said.

With this, the total incidence of excise duty on petrol has risen to ₹22.98 per litre and that on diesel to ₹18.83.

The tax on petrol was ₹9.48 per litre when the Modi government took office in 2014 and that on diesel was ₹3.56 a litre.

In all, duty on petrol rate was hiked by ₹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 ₹2,42,000 crore in 2016-17 from ₹99,000 crore in 2014-15.

It cut excise duty by ₹2 in October 2017 and by ₹1.50 a year later. But it raised excise duty by ₹2 per litre in July 2019.

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

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