Govt tables notifications on excise duty, road cess rise on

Minister of State for Finance Anurag Singh Thakur on Monday tabled three notifications relating to increasing in excise duty and road cess on petrol and diesel by Rs 3 per liter, amidst uproar by the opposition in Lok Sabha. Thakur placed before the House the notifications dated March 13, 2020, seeking to raise special additional excise duty on petrol by Rs 2 to Rs 10 per liter in case of petrol and Rs 4 per liter from Rs 2 in case of diesel.

Additionally, road and infrastructure cess was raised by Re 1 per liter on petrol and diesel to Rs 10. Besides, another notification seeking to increase the Road and Infrastructure Cess (RIC), collected as additional duty of customs on both petrol and diesel from Rs 9 to Rs 10 per liter was also laid on the table.

Opposition members protested the government move. They questioned the hike in duty when global crude prices have come down significantly. Later in the day, 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," Ray said With this, the total incidence of excise duty on petrol has risen to Rs 22.98 per liter and that on diesel to Rs 18.83.

The tax on petrol was Rs 9.48 per liter when the Modi government took office in 2014 and that on diesel was Rs 3.56 a liter. In all, duty on petrol rate was hiked by Rs 11.77 per liter and that on diesel by 13.47 a liter in those 15 months that helped the government to more than double the excise mop up to Rs 2,42,000 crore in 2016-17 from Rs 99,000 crore in 2014-15.

It cut excise duty by Rs 2 in October 2017 and by Rs 1.50 a year later. But it raised excise duty by Rs 2 per liter 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 Rs 6 per liter (from Rs 76.01 a liter on January 11, 2020, to Rs 69.87 a liter on March 14 for petrol, and from Rs 69.17 to Rs 62.58 for diesel during the same period in Delhi).

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