Excise Duty Cut: Relief to the public, but trouble to the treasury! Government will suffer loss of ₹7,000 crore in just 15 days

Excide Duty on Petrol-Diesel: Amidst the ongoing tension in the Middle East for the last 28 days, the Government of India has announced a cut in excise duty to keep the prices of petrol and diesel stable. The government has reduced the excise duty on petrol from Rs 13 per liter to Rs 3 per litre. At the same time, the excise duty on diesel which was Rs 10 per liter has been reduced to zero. However, there will be no reduction in the prices of petrol and diesel after this cut.

The government has taken this step to reduce the losses incurred by oil companies. At the same time, due to this cut, the government will suffer a loss of approximately Rs 7 thousand crore every 15 days. Central Board of Indirect Taxes and Customs (CBIC) Chairman Vivek Chaturvedi gave this information on Friday.

Huge loss to government revenue

CBIC Chairman Vivek Chaturvedi on Friday said the government’s move to cut excise duty on petrol and diesel will lead to a revenue loss of around Rs 7,000 crore in 15 days. Despite incurring huge losses on the sale of both these fuels due to rising international prices, OMCs had not increased the retail prices of petrol and diesel.

CBIC Chairman Vivek Chaturvedi said in a briefing that the reduction in excise duty will also ensure domestic availability of petrol-diesel and aviation turbine fuel (ATF). He said that the purpose of reduction in excise duty on petrol and diesel is to reduce the losses (under recovery) of oil marketing companies and to ensure that fuel prices do not increase for the common man.

Duty imposed on export of diesel

To meet the domestic demand, the government has also imposed export duty of ₹21.5 per liter on diesel and ₹29.5 per liter on ATF. That means, the company which sends petrol and diesel from India to another country will have to pay export duty. CBIC Chairman Vivek Chaturvedi said the additional duty on export of diesel and aviation turbine fuel (ATF) will fetch ₹1,500 crore to the exchequer in two weeks.

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Finance Minister also gave statement

finance minister Nirmala Sitharaman has launched social media platform ‘X’ But said in a post that in view of the West Asia crisis, the central excise duty on petrol and diesel for domestic consumption has been reduced by ₹ 10 per liter. This will protect consumers from price increases. Apart from this, a duty of ₹ 21.5 per liter has been imposed on the export of diesel and ₹ 29.5 per liter on ATF, the Finance Minister wrote in his post. This will ensure adequate availability of these products for domestic consumption. Parliament has been informed about this.