Excise tax revenues for gasoline and diesel up 40% by October in fiscal yr 21

The centre’s excise tax revenues, most of which come from gasoline, diesel and crude oil, saw a significant 40% year-over-year increase in tax revenues over the first seven months of this fiscal year, despite the pandemic and economic recession 16%.

The center’s revenue from excise duties was included £1.6 trillion in the period from April to October, well above that £1.14 trillion was collected over the same period a year ago, data from the Controller General of Accounts showed.

Over the same period, corporate income tax, income tax, goods and service tax (GST) and the deduction of items in the 28% GST range showed a decrease of 17% to 37% year over year. This reflected the loss of income and a collapse in demand in the economy.

The sharp drop in global oil prices earlier this year had provided the government with an unexpected source of income and led to an increase in taxes on gasoline and diesel. Since March, the government had increased the additional special excise tax and the additional excise tax on gasoline and diesel, which were levied as road and infrastructure levies, in two tranches, resulting in an increase in £13 on gasoline and £16 on diesel per liter.

The tax hikes did not increase the retail price, but they denied consumers the benefit of lower global fuel prices. Oil prices have since declined and economic activity has picked up. Crude oil, which stood at a monthly average of $ 19.9 a barrel in April, traded around $ 48 a barrel on Monday.

The increased level of energy taxes during a recession while policymakers seek a manufacturing-led recovery shows the limited alternative means of increasing revenue available to the government. Overall, tax revenue has remained below the prior-year level, and sales of stakes in state-owned companies have not increased during the pandemic. For this reason, the center has re-prioritized its spending for the current year and increased borrowing.

Gasoline costs £83-90 per liter in metropolitan areas and diesel £73-80 per liter. India follows a market-based pricing regime called the trade parity price for gasoline and diesel and there are no subsidies.

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