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Govt can cut excise duty on petrol, diesel by Rs 8.5 a litre without hurting revenues, Auto News, ET Auto

Govt can cut excise duty on petrol, diesel by Rs 8.5 a litre without hurting revenues, Auto News, ET Auto
Concerning November 2014 and January 2016, the governing administration experienced lifted excise responsibility on petrol and diesel on 9 occasions to choose away gains arising from plummeting world wide oil costs.

New Delhi: The governing administration has home to lower excise responsibility on petrol and diesel by up to Rs 8.5 per litre without the need of impacting its concentrate on for earnings from the tax on the two fuels, analysts said.

Petrol and diesel costs hover at a historic higher following a relentless boost in premiums in excess of the past 9 months. There have been calls by opposition get-togethers as well as sections of modern society to the governing administration to cut down excise responsibility to ease consumer soreness.

“We estimate excise responsibility on car fuels in FY22 (April 2021 to March 2022), if it is not lower, at Rs 4.35 lakh crore vs . spending budget estimate of Rs three.2 lakh crore.

“Hence, even if excise responsibility is lower by Rs 8.5 per litre on or prior to April 1, 2021, FY22E spending budget estimate can be met,” ICICI Securities said in a notice.

It expressed optimism for an excise responsibility lower offered desire restoration, impending privatisation and inflation issues but envisioned it to be more modest than Rs 8.5 a litre.

Excise responsibility was lifted by Rs 13 and Rs sixteen per litre on petrol and diesel among March 2020 and May possibly 2020, and now stands at Rs 31.8 on diesel and Rs 32.9 per litre on petrol.

The boost in excise responsibility was to mop up gains arising from global crude oil costs falling to a two-ten years small.

But, with oil costs recovering, it has not yet restored the taxes to their unique concentrations.

“If the lower is more modest, which we be expecting, FY22 excise responsibility will be increased than the spending budget estimate,” ICICI Securities said.

Central and state taxes make up for 60 per cent of the retail marketing selling price of petrol and in excess of fifty four per cent of diesel.

Petrol is priced at Rs 91.seventeen per litre in Delhi and diesel arrives for Rs 81.47.

The premiums of frequent petrol experienced last month crossed the Rs 100-mark at a several destinations in Rajasthan and Madhya Pradesh, which levy the best benefit-extra tax (VAT) on the fuel in the state.

Concerning November 2014 and January 2016, the governing administration experienced lifted excise responsibility on petrol and diesel on 9 occasions to choose away gains arising from plummeting world wide oil costs.

In all, responsibility on petrol level was hiked by Rs eleven.seventy seven per litre and that on diesel by 13.47 a litre in people 15 months that served the government’s excise mop-up more than double to Rs 2,42,000 crore in 2016-seventeen, from Rs 99,000 crore in 2014-15.

The governing administration experienced lower excise responsibility by Rs 2 in October 2017, and by Rs 1.50 a year later. But, it lifted excise responsibility by Rs 2 per litre in July 2019. It once more lifted excise responsibility on March 2020, by Rs three per litre each and every. In May possibly that year, the governing administration hiked excise responsibility on petrol by Rs 10 per litre and that on diesel by Rs 13 a litre.