The Union government will earn more than Rs 1.6 lakh crore in additional revenues this fiscal from a record hike in excise duty on petrol and diesel, making taxation on auto fuels to 70 percent of the price.
Tuesday evening, the government hiked excise duty on petrol by Rs 10 per litre and that on diesel by Rs 13 a litre to earn from international oil prices falling.
However, the petrol price remained unchanged at Rs 71.26 a litre and diesel at Rs 69.39 and state-owned oil firms made a profit from fall in international oil rates.
This is the second hike in excise duty in less than two months and will help the government gain more than Rs 1.6 lakh crore in additional revenues. Moreover, the slump in consumption due to COVID-19 lockdown will add the benefit.
Earlier, in March, the excise duty was raised on petrol and diesel by Rs 3 per litre, to earn an additional estimated Rs 39,000 crore. Just earlier this week, the Delhi state government too raised VAT on petrol by Rs 1.67 litre, and on diesel by Rs 7.1 per litre. Earlier too, the governments at the center and states, have used petrol and diesel as cash cows, raising duties to augment the exchequer’s tax revenue.