Government to Increase Excise Duty on Petrol & Diesel: Taking into consideration the coronavirus outbreak in India, the 2020 Finance Bill has been recently updated with some amendments. As the pandemic is uprooting the Indian economy on a worse level, the government has officially decided to mobilise additional resources that will further help to fight the disease in the country.
According to the recent amendments made to the 2020 bill, the excise duty on petrol and diesel has been raised by INR 8 per litre by the Indian government. The amendment in the Finance Bill has been passed in the Lok Sabha without any questions which means that the government can now increase the special excise duty on petrol to INR 18 and on diesel to INR 12.
Thus by the increase in excise duty, the government will be raising the retail price of petrol and diesel by INR 5 to INR 6 while the remaining will be borne by the private oil firms.
The reports further suggest that hiking the prices by INR 8 per litre, the government will be able to witness an increase in the annual excise collection by INR 1,20,000 crore. Since the government is expected to save around $15-20 billion in oil import bill and the recent increase in fuel prices will help India to manage the economic downfall which is expected to happen during the pandemic.
The increase in the retail prices of the fuel at this point of time could already harm the degrading economy further while at the same time increase the prices of several other essential products.
At present, the total central excise duty on petrol stands at INR 22.98 per litre and for the diesel at INR 18.83 per litre. If the government decides to implement the new excise duty sooner than later, the total excise duty on petrol prices will go up to INR 30.98 per litre while the diesel prices will witness a rise in the excise duty by up to INR 26.83 per litre which will further carry additional VAT.
