Post Announcement in Union Budget 2019-2020- Indian Observes Hike in Prices of Petrol and Diesel
Budget - 2019MoneyNews

Post announcement in Union Budget 2019-2020 – Indian observes a hike in prices of Petrol and Diesel

After the announcement of hike in fuel taxes in Union budget 2019-20, the Government of India has raised tax on fuel or crude oil due to which there comes a hike in the prices of Petrol and Diesel by ₹ 2.5 per litre and ₹ 2.30 per litre respectively. Finance Minister, Nirmala Sitharaman has raised excise duty and cess on road and infrastructure on the auto fuel by ₹ 2 per litre to rise over ₹ 28000 crores.

Last week the cost of petrol in Delhi was ₹ 70.50 per litre and in Mumbai, it was ₹ 76.15 while the cost of diesel was ₹ 64.33 per litre and ₹ 67.40 per litre respectively. FM has levied ₹ 1 per tonne import or custom duty on crude oil.

More than 220 million tonnes of crude oil is imported in India and additionally, ₹ 20 crores will be given to the Government as a new duty. Currently, no customs duty is charged by the Government on crude oil except national calamity contingent duty (NCCD) as per ₹ 50 per tonne.

In the budget speech, FM said that crude prices have alleviated from their highs. This situation had given rise to review excise duty and cess on petrol duty. She suggested raising special additional excise duty as well as road and infrastructure cess by ₹ 2/litre on petrol and diesel.

In total, petrol is currently enticed by ₹ 17.98 per litre by excise duty. As per the reports, ₹ 2.98 is basic excise duty and ₹ 7 is special additional excise duty and ₹ 8 is road and infrastructure cess.

Sum of excise duty inticed on diesel is ₹ 13.83 per litre. Out of it ₹ 4.83 is basic excise duty. Re 1 is special additional excise duty and ₹ 8 is road and infrastructure cess.

On all these above-mentioned taxes, VAT is also charged which varies from state to state:

  1. In Delhi, VAT is levied @ 27 % on petrol and 16.75 % on diesel.
  2. In Mumbai, VAT charged on petrol is 26 % + 7.12 % a litre. Additional tax on the other side – diesel intices by 27 % sales tax.

Earlier, custom duty was levied equivalent to the excise duty but now from 6 July, the Government has removed ₹ 9 per litre import duty equals to road and infrastructure cess.

Central Government has earned benefit from this hike in taxes on petroleum products exceeding the fuel subsidy bill of the last 15 years by over ₹ 91000 crores till 2018-19.

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