Central Government Reduces Excise Duty on Petrol & Diesel
Finance Minister Nirmala Sitharaman on 21st May said Centre has decided to reduce excise duty on petrol and diesel to avoid increase in fuel prices
You would remember that ISH News had earlier released a video about the bifurcation of the petrol and diesel prices. The price of petrol includes the base price + excise duty + VAT. You can see the detailed video here on this link: khttps://youtu.be/xxs8kBSzEXM Price of petrol includes excise duty which is taken by the central government and VAT which is taken by the state governments. Now, Excise duty includes - Basic Excise Duty (BED), Special Additional Excise Duty (SAED), Road and Infrastructure Cess (RIC) and Agriculture & Infrastructure Development Cess (AIDC). Out of these 4, Only Basic Excise Duty (BED) is shared by the central government and state government. Special Additional Excise Duty (SAED), Road and Infrastructure Cess (RIC) and Agriculture & Infrastructure Development Cess (AIDC) are not sharable. These are taken by the central government. As you are all aware that in recent months, petrol and diesel prices have skyrocketed due to the surge in international oil prices.
Finance Minister Nirmala Sitharaman on 21st May said that PM Modi is committed to help the poor and common man. The common man is suffering because of the price of rise. So, Sitharaman said that the Central government is announcing steps to help our people. In this regard, the Central government has decided to reduce excise duty on petrol by Rs 8 per litre and on diesel by Rs 6 per litre, tweeted Sitharaman This will reduce the price of petrol by Rs 9.5 per litre and of Diesel by Rs 7 per litre. Road and Infrastructure Cess (RIC) which goes to the central government and is not shared with states. The excise duty reduction is done in this RIC. So this will have a revenue implication (loss) of around Rs 1 trillion for the central government. Nirmala Sitharaman also said that earlier in November 2021, the central government had reduced the excise duty and had requested the state government to reduce VAT. Some of the states did reduce the VAT but there were some states that did not reduce the VAT.
So now Sitharaman said that seeing the people suffering and to give relief to the common man, the central government has further reduced the excise duty and she requested the states and especially those states which had not reduced VAT earlier. There is a scheme called Pradhan Mantri Ujjwala Yojana which gives subsidies on gas cylinders. Sitharaman also said that Centre will give a subsidy of Rs 200 per gas cylinder (upto 12 cylinders) to beneficiaries of Pradhan Mantri Ujjwala Yojana. This will have a revenue implication (loss) of around Rs 6,100 crore a year. Further, Sitharaman also said that the government is also reducing the customs duty on raw materials for plastic products, import duty on raw materials of steel etc. Maharashtra, Rajasthan, Kerala, and Odisha reduced VAT on fuel prices after the central government announced the reduction in excise duty
