The government will look to reduce prices of petrol and diesel through a cut in taxes when the time comes, the head of the agency responsible for excise and other indirect tax collections said on Tuesday.
Record excise duty on petrol and diesel helped indirect tax collections rise by more than 59 per cent in the fiscal year ended March 31 (2020-21) when compared to the previous year.
"We are very hopeful that revenue in the coming months is going to be very strong," Central Board of Indirect Taxes and Customs (CBIC) Chairman M Ajit Kumar said over a video call with journalists to give out tax collection numbers.
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"As far as reduction in fuel prices is concerned, it is a matter that is being looked into constantly and I am as sure as and when the time comes, a view will be taken on that," he said.
Last year, the government raised excise duty on petrol by Rs 13 per litre and that on diesel by Rs 16. Excise duty on petrol now totals Rs 32.90 a litre and makes up for 36 per cent of the Rs 90.56 a litre retail selling price of the fuel in Delhi.
Excise duty on diesel totals Rs 31.80 and makes up for 39 per cent of the retail selling price of Rs 80.87.
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Together with state VAT, taxes make up for 55-60 per cent of the price that consumers pay.
Petrol prices crossed Rs 100-mark in some places in Rajasthan, Maharashtra, and Madhya Pradesh in February as international oil soared. But as soon as elections to five states including West Bengal, Tamil Nadu, and Kerala were announced, the prices hit a freeze button.
And they declined a bit when international prices dipped on worries about demand recovery amid a resurgence of Covid infection. Petrol had hit an all-time high of Rs 91.17 a litre in Delhi in February and diesel touched a record Rs 81.47.
CBIC member (Budget) Vivek Johri said a 59.2 per cent growth in excise collections is partly "explained by an increase in the rate of tax".
