Coal News We love to talk!
Consumers will continue to pay higher taxes on petrol and diesel as the government has no plans to lower the excise duty on fuel.
This is because notwithstanding the robust collections from the Goods and Services Tax, the Centre continues to remain vigilant about its fiscal health. “There is no proposal to lower the excise duties on petrol and diesel. We are not looking at anything of the sort at the moment,” said a senior government official.
While the dividend payment from the Reserve Bank of India at Rs. 30,659 crore is lower than estimated Rs. 58,000 crore and uncertainty over the projected Rs. 72,500 crore from disinvestment receipts, the Centre is keeping a close eye on its fiscal projections.
Global prices still low
A major source of comfort is the still low prices of crude oil in the global market. Sources said that a re-look may not take place until global crude oil prices touch at least $70 a barrel.
“Though prices have begun to increase in the international market, they are still within range and there is not too much pressure from taxes on domestic consumers,” said the official. Recently, Petroleum Minister Dharmendra Pradhan too had ruled out a cut in duties and had said it would be looked into when needed.
The international crude oil price of the Indian Basket touched $53.63 per barrel on September 8, according to data by Petroleum Planning and Analysis Cell. With global crude oil prices at a record low, the government through a series of duty hikes in late 2015 and early 2016 had hiked the excise duty on petrol and diesel to help improve its own finances.
In all, the excise duty on petrol was hiked by Rs. 11.77 per litre and on diesel by Rs. 13.47 a litre. This has helped the Centre raise about Rs. 1,00,000 crore in Central excise duties this fiscal, primarily through the higher tax on petrol and diesel, which are still outside the ambit of GST.
Analysts, in fact believe that the Centre could choose to further increase the duties if international prices remain low and meeting the fiscal deficit target remains a challenge.
“The fiscal deficit target of 3.2 per cent is a challenge. The government may either have to lower expenditure or they might even have to review the excise duty on petroleum to meet it,” said DK Srivastava, Chief Policy Advisor, EY (India).
Tax collections from GST amounted to Rs. 92,283 crore in August, although both the government and analysts believe it is too early to make a trend. “Though prices have begun to increase in the international market, they are still within range and there is not too much pressure from taxes on domestic consumers.”
- Praj Ind inks MoUs with IOC, BPCL for bio-ethanol plants Read more
- India's coal imports for blending halve in current financial year Read more
- PGCIL to up 12th Plan capex by 20% Read more
- FinMin hopes for 50% cut in oil subsidy in FY14 Read more
- OIL picks up 50% stake in Russia block for $85 million Read more
- Oil Ministry may dip into RIL incremental gas price hike revenue account Read more
- Reliance Industries-ONGC gas theft row: Report set to get delayed Read more
- Solar tariffs at Rs 3 a unit may be the new normal: NTPC CMD Gurdeep Singh Read more
- Oil wars: How Kremlin's $13 billion Indian deal almost fell apart Read more
- Falling inventory losses, increasing margins to boost profits at OMC Read more