Excise cut to mount pressure on states that didn’t reduce VAT last time – Times of India


NEW DELHI: The Centre will forego Rs 1 lakh crore in tax income on this fiscal on account of the excise duty minimize. The subsidy for Ujjwala customers will entail an expenditure of Rs 6,100 crore, finance minister Nirmala Sitharaman mentioned whereas asserting the selections.
That is the second responsibility minimize by the Centre in slightly greater than six months.
The most recent responsibility minimize will deliver down petrol worth by Rs 9.5 per litre and diesel by greater than Rs 7, relying upon the prevailing VAT charge in states, assuming the bottom charges stay the identical. The Centre had on November 4, 2021 lowered excise responsibility by Rs 5 on petrol and Rs 10 on diesel. The most recent minimize has introduced down the excise responsibility to the pre-pandemic degree – fairly decrease by a number of paise. On March 1, 2020, excise responsibility stood at Rs 19.98 a litre on petrol and Rs 15.83 a litre on diesel. These will. Now be Rs 19.90 and Rs 15.80 a litre, respectively.
The most recent excise responsibility minimize on gasoline comes after the Ukraine warfare resulted in a spike in world costs, which was handed on to customers leading to petrol costs crossing the Rs 100 a litre mark and cooking gasoline cylinders costing over Rs 1,000 in most components of the nation.
The minimize will deliver down petrol worth by Rs 9.5 per litre and diesel by greater than Rs 7, relying upon the prevailing VAT charge in states, assuming the bottom charges stay the identical.
The Centre had on November 4, 2021 lowered excise responsibility by Rs 5 on petrol and Rs 10 on diesel. The most recent minimize has introduced down the excise responsibility to the pre-pandemic degree — fairly decrease by a number of paise. On March 1, 2020, excise responsibility stood at Rs 19.98 a litre on petrol and Rs 15.83 a litre on diesel. These will. Now be Rs 19.90 and Rs 15.80 a litre, respectively.
The discount in pump costs shall be barely extra in states with greater VAT corresponding to Maharashtra, Rajasthan, MP and West Bengal than these with decrease tax charges. It is because the incremental lower in state levy shall be extra in high-tax states as VAT is charged after excise responsibility, supplier fee and different prices.
Within the final spherical a number of BJP-ruled states had additionally lowered VAT on auto gasoline, leading to a sharper discount in costs at pumps. The discount in central tax to pre-Covid degree takes away one of many opposition’s fundamental planks for criticising the federal government. It’s going to mount strain on states that didn’t scale back VAT to match the November 4 excise responsibility minimize to do it this time.
After the excise discount in November, BJP-ruled states had promptly minimize VAT. The AAP authorities in Delhi and Congress authorities in Punjab adopted go well with.


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