The publication coronavirus epidemic gets worse day-by-day, the government has decided to mobilize additional resources which would be necessary for fighting the deadly disease. The Finance Ministry has decided to make some amendments to the Finance Bill 2020, wherein the government will be raising specific additional excise duty on petrol and gas up to Rs 8 per liter.
Making alterations to the eighth schedule of the Finance Act 2002, the government has suggested a hike on gasoline prices by Rs 18 per liter from Rs 10 per liter whereas the duty diesel will go up from Rs 4 per liter to Rs 12 per liter. But it is not yet clear if the authorities will use the Rs 8 per liter increase as a cap to increase duties to this level or would be notifying the increase in 1 go. By imposing the new excise duty, the retail price and petrol may increase by Rs 5 to Rs 6 per liter whereas the rest will be borne by the public sector oil market firms that have been reducing the costs for the petroleum products daily basis, which can be in-line with the falling international oil rates.
Notably, The Rs 8 per liter increase would be a fantastic move for the authorities as it would boost its annual excise set from the industry to Rs 1,20,000 crore. The growth in oil products along with saving over $15-20 billion in oil import bill in the financial year 2021 will ensure enough boosts to bring the economy back on the track after publication Corona epidemic. It is also important to be aware that any such increase in gas and diesel retail prices could damage the economy, which is already facing a slowdown. Additionally, the cost hike on gasoline and gas will also multiple effects resulting in a rise of numerous essential products as well as services that would affect inflation.
Finance Ministry has proposed to increased excise duty on petrol and gas up to Rs 8 per liter
Previously, the government increased the excise duty on the two petroleum products on March 14 by Rs 3 per liter, which is the greatest in the previous five decades, using the reduced worldwide oil prices. This growth could assist the center to gain earnings of up to Rs 45,000 for the entire calendar year. But it saved customers from any immediate rise in the retail price of the two-car fuels which might be shifted after keeping any increase to the minimum.
According to this increase in excise duty of Rs 8 per liter will be the greatest in both tenures of the NDA government.
Currently, the total central excise duty on petrol and diesel stands at Rs 22.98 per liter and Rs 18.83 per liter respectively. Having an increase of Rs 8 per liter, these prices would go up considerably to Rs 30.98 per liter for petrol and Rs 26.83 per liter for petrol. Apart from this, the states also impose VAT on both of these products.