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Centre to earn Rs 2250 billion more from new petrol, diesel taxes
Centre will earn an additional Rs 2250 billion from new taxes on petrol, diesel and other fuels imposed since lockdown began. This is despite global crude prices touching record lows. Experts suggest the government and the oil marketing companies are technically gaining about Rs 7.30 billion a day because of higher prices for the past month and a half. Bloomberg Intelligence says annual gains for the government would be $30 billion (Rs 2250 billion). Last fiscal, Centre and state governments’ overall tax collection from the petroleum sector in FY20 stood at Rs 5500 billion, the Petroleum Planning & Analysis Cell data suggests.
The additional levies are expected to help Centre tide over economic loss due to coronavirus-infused lockdown, which has squeezed its income from taxes amid higher spending on welfare programmes for poor and migrants. Centre has increased excise duty by Rs 13 per litre on diesel and Rs 10 per litre on petrol in May, which catapulted India as the country with highest taxes (around 69 per cent) on fuel, placing it among the countries like France, Germany, Italy and Britain. The government also increased road cess on fuel by Rs 8 per litre.
State governments have also increased their value added taxes on fuel to make up for revenue loss amid the COVID-19 crisis. States like Delhi, Andhra, Assam and West Bengal reported over 90 per cent fall in revenue due to the coronavirus lockdown. The increase in duty had simply subsumed the headroom left by a major fall in crude oil prices in April.
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