Excise duty on petrol, diesel cut by Rs 2 per litre; revenue loss of Rs 13,000 crore in FY18
Petrol and diesel prices have reached to a three year high since the time they have undergone daily revision - which has impacted India's Wholesale Price Index (WPI) inflation too.
Ministry of finance on Tuesday cut excise duty on petrol and diesel by Rs 2 per litre each with effect from October 04, 2017.
Decision behind this reduction by the government is in order to cushion the impact of rising international prices of petrol and diesel.
As per the ministry, with this reduction, revenue loss from excise duty will be Rs 13,000 crore in the remaining part of financial year FY18.
Petrol prices in many cities in India have inched up to as close as Rs 80 to a litre - levels last recorded in the year 2014.
SC Tripathi, former petroleum secretary said, "One key thing that hampers India' fuel is the amount of taxes being charged currently. Petrol and diesel prices do not come under the umbrella of Goods and Services Tax – which proclaims the agenda of 'one tax one nation'."
At present, excise duty on petrol products stood at Rs 21.48 per litre and Rs 17.33 per litre on diesel products.
From VAT, government earned income of Rs 1,66,378 crore in last fiscal (FY17) compared to the income of Rs 1,29,045 crore in FY14. Income from excise duty touched a whopping Rs 2,42,961 crore in FY17 as against mere income of Rs 77,982 crore in FY14.
70% of total final retail prices of petrol and diesel are accounted by tax charges.
This rise in the prices of petrol and diesel was also witnessed in WPI inflation, which has increased to 3.24% for the month of August 2017, as compared to 1.88% for the month of July 2017.
"This also prompted the Government to act swiftly in this regard," added the ministry.