Govt raises Rs60,796.25 cr in excise duty on petroleum products in April-June
18 August 2016
The government seems to have successfully turned the oil sector from the biggest burden on the exchequer to a revenue gusher with excise duty collections of Rs60,796.25 crore from petroleum products in the first quarter if the current fiscal.
The fall in international prices of crude oil has been a double blessing for the economy and the government, helping not only to save precious foreign exchange but also end consumer subsidies and save state-run oil marketing companies from the burden of under-recoveries.
With Rs60,796.25 crore of the net central excise collection of Rs91,491 crore during April-June of the current fiscal coming from petroleum products, the sector now accounts for two of every three rupees collected as excise.
Other products, including automobiles, make up the remaining Rs30,695 crore of the excise mop-up.
For the full 2016-17 fiscal, the government has targeted central excise duty (exclusive of cess administered by other departments) of Rs3,17,000 crore, against the overall excise collection for the full fiscal of Rs2,86,382 crore for the 2015-16 fiscal.
''The contribution of petroleum products to excise duty collections has always been significant,'' said an official, noting that excise duty receipts in the past 30 months have risen in part due to the additional levies.
The sharp rise in indirect tax collections in July could, indeed, be attributed to the higher excise duty receipts from petroleum, oil and lubricants.
Apart from a basic excise duty on most petroleum products, the centre also levies a special additional excise duty Rs6 per litre on petrol and diesel. It also hiked the additional excise duty to Rs6 per litre on both fuels.
This has been made possible by lower global crude oil prices.
The increased excise mop-up helped the government meet its commitment to boost spending, including payments of arrears and revised salaries, besides meeting the fiscal deficit target of 3.5 per cent in 2016-17.
''The additional excise duty on petrol and diesel is a road cess and it is used for the clearly specified purpose of highway and rural road construction,'' finance ministry officials pointed out.
These levies are expected to stay until oil prices see any dramatic increase, officials pointed out.