Moneycontrol News
In his Budget 2018 speech on Thursday, Finance Minister Arun Jaitley slashed basic excise duty on petrol and diesel by Rs 2. The government also cut additional excise duty on the fuels by Rs 6. The cuts, however, were offset by the introduction of a new road cess of Rs 8 per litre. Therefore, petrol and diesel prices will likely remain unchanged.
Earlier, the excise duty was levied at Rs 14.14 — for unbranded and branded petrol — the overall excise duty cut for the petrol amounts to Rs 10.14. Similarly, for diesel, an excise duty of Rs 19.02 was levied which is now stands at Rs 15.02.
The reductions and addition in excise duty come at a time when petrol hit a fresh record of Rs 80 per litre in Delhi, Mumbai, Bangalore, Pune, Chennai and Noida.
With crude prices nearing USD 70 per barrel, the Oil Ministry had sought an excise duty cut on petrol and diesel in the Budget. Any cut in excise duty would have offset the impact of rising global crude prices.
An excise duty cut would also have put an additional burden on the fiscal deficit target even as the government battles lower indirect tax revenues since the GST was rolled out last year.
The country would now closely watch whether petrol and diesel are brought under the ambit of GST. Jaitley had earlier indicated that the Modi government leans toward bringing petrol products under GST, but is awaiting for consensus with state governments.
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