The government is constantly looking at reducing excise duty on petrol and diesel, but a decision on it will be taken when the time comes, head of country's apex indirect tax authority said. Contentions have been raised over high excise duty on fuels in the recent past as petrol prices touched Rs 100 per litre in several cities of India.
"We are very hopeful that revenue in the coming months is going to be very strong. As far as reduction in fuel prices are concerned, it is a matter that is being looked into constantly and I am as sure as and when the time comes, a view will be taken on that," Central Board of Indirect Taxes and Customs (CBIC) Chairman M Ajit Kumar said in response to a question on when can customers expect a reduction in excise duty on petrol and diesel.
Kumar, however, did not divulge any details on the timeline for such a tax reduction.
Last year, the central government increased excise duty on petrol by Rs 13 per litre, taking it to Rs 32.90 per litre, or 36 per cent of Rs 90.56 per litre retail price in Delhi. The same for diesel was increased by Rs 16 per litre last year, taking excise duty on the fuel to Rs 31.80 per litre, or 39 per cent of the retail selling price of Rs 80.87 per litre.
Coupled with state VAT, indirect taxes constitute 55-60 per cent of the price customers pay for these fuels.
Meanwhile, the record high excise duty on petrol and diesel "partly" helped the government rake in 59 per cent more indirect tax collections in financial year 2020-21 as compared to the previous fiscal, stated CBIC Member (Budget) Vivek Johri.
Johri clarified that a reduction in excise duty could hurt government revenues. There has been a decline in fuel consumption as many states recently imposed partial lockdowns and other restrictions to curb the spread of COVID-19.
"Because of COVID, you would have seen recent reports of a dip in consumption of petroleum products, particularly diesel, motor spirits (petrol) and other fuels. So revenue will be a function of where the rates settle, if at all there is a change in the rates, and the level of consumption that we see in the economy," he said.
(Edited by Vivek Punj)