According to data available from the Controller General of Accounts in the Union Ministry of Finance, the Excise Duty collections have seen a 48% jump year-over-year for the first four months of 2021-22. From a total collection of Rs.67,895 crore for the same period last year, this year’s collection has seen a substantial increase and stands at Rs.1 lakh crore.
GST, introduced in India in 2017, covers almost all goods and services under its ambit. However, petrol, diesel, aviation turbine fuel (ATF), and natural gas still come under the excise duty laws. A bulk of the collections for April-July 2021 are from the levy of excise duty on petrol and diesel, which saw an increase in sales as the economy recovers from the COVID-19 pandemic.
The incremental collection of Rs 32,492 crore is three times the Rs.10,000 crore liability the government has this year towards the repayment of oil bonds issued by the previous UPA government to subsidise fuel. In total, the UPA government had issued bonds worth Rs.1.34 lakh crore to state-owned companies as compensation for selling fuel such as kerosene, diesel, and cooking gas at rates below cost.
Of the total amount due, Rs.3,500 has been repaid so far. Rs.10,000 was due in the current fiscal year, Rs.31,150 is to be repaid in FY 2023-24, Rs.52,860.17 in FY 2024-25 and Rs.36,913 in 2025-26. Finance Minister Smt. Nirmala Sitharaman had ruled out the slashing of petrol and diesel prices as they skyrocket, stating that the payments due in repayment of the oil bonds are limiting fiscal space to provide the necessary relief.
Excise duty on petrol was hiked from Rs.19.98 to Rs 32.90 per litre last year to make good the gain arising from plunging international oil prices as the pandemic slowed demand. With the demand increasing, international oil prices have soared, contributing to domestic fuel prices shooting up as well. Today, more than half the country buys petrol as above the Rs.100 per litre mark.
On the issue, Minister of Petroleum and Natural Gas Shri Hardeep Singh Puri had recently tweeted, “In ‘India’s Lost Decade’ known for rampant impunity & policy paralysis, UPA Govt saddled future governments with Oil Bonds. More than Rs.1.5 lakh cr of these remain to be repaid, thus tying up crucial resources, limiting fiscal space & restricting financial freedom of OMCs.”
He further said, “The important E&P sector was fund-starved. As a result, our import bill continues to be high. Nearly Rs.3.6 lakh cr profits of oil companies were instead used for price stabilisation by a remote-controlled govt of ‘economic experts’ to hide behind an ‘All is Well’ smokescreen.”
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