Govt’s tax mop-up from petrol, diesel rose by whopping 88% in a single year

• The rise in tax collection comes in the backdrop of a record hike in central excise duty on petrol last year from Rs 19.98 per litre to Rs 32.90 per litre
• The excise duty rates have been calibrated to generate resources for infrastructure and other developmental items of expenditure keeping in view the prevailing fiscal situation, said MoS Finance in Lok Sabha

New Delhi: The government's tax mop-up from petrol and diesel rose by 88 percent in FY21 year-on-year as it raked up Rs 3,34,894 crore as opposed to Rs 1,78,311 crore in FY20, Lok Sabha was told on Monday. The rise in tax collection follows a record hike in central excise duty on petrol last year from Rs 19.98 per litre to Rs 32.90 per litre and on diesel from Rs 15.83 per litre to Rs 31.8 per litre.

Central excise duty increased to generate resources: MoS Finance

In a written response shared by Minister of State for Finance Pankaj Choudhary in the Lok Sabha on Monday, the minister explained the rise in excise duty by saying, "The excise duty rates have been calibrated to generate resources for infrastructure and other developmental items of expenditure keeping in view the prevailing fiscal situation." Another response shared by Choudhary in the Lok Sabha revealed that the Central tax levy on petrol has nearly doubled between 2015 and now, while the tax on diesel has trebled during the same period.

According to the data shared by Choudhary, the central excise duty on petrol was 17.46 per litre on July 1, 2015, while that on diesel was Rs 10.26 per litre on the same date. Currently, the tax on petrol is Rs 32.90 per litre and on diesel is Rs 31.80 per litre.

The news come in the backdrop of petrol and diesel touching record highs over the last few weeks. Jaipur saw record high fuel prices on Monday as petrol was sold at Rs 108.71 per litre and diesel was sold at Rs 99.02 per litre.

Govt has collected Rs 94,181 cr central excise duty on petrol, diesel so far

The government has collected Rs 94,181 crore central excise duty on petrol and diesel in FY22 so far, Choudhary told the Lok Sabha. In a written response to a question asked in the Lok Sabha, the minister said, "The total central excise duty collected on petrol and diesel from April to June 2021 is about Rs 94,181 crores… Average share of central excise duty on petroleum products from 2017-18 to 2020-21 (P) in gross revenue collected by union is 12 percent."

Govt's levies make 60% of petrol prices

In the backdrop of a financial crunch induced by the COVID-19 pandemic, the Narendra Modi government has repeatedly raised sales taxes to cushion public finances. Taxes make up around 60 percent of the retail price of fuels and taxes on gasoline and diesel have surged around six times since 2013. The issue has drawn severe criticism from the Opposition. However, in response, the government has only expressed its inability to intervene and control prices since the prices are market-controlled since 2010. The Centre has also been reluctant to slash taxes in order to cool off fuel prices, saying that its tax collection has been hit severely in the wake of the COVID-19 pandemic.

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