Amid record-high prices of fuel, Finance Minister Nirmala Sitharaman announced on Monday, 16 August, that the excise duty on petrol and diesel will not be reduced, 'due to Oil Bonds', floated by the UPA government, and added that 'the burden has come to our government'.
Sitharaman explained that the UPA government had reduced fuel prices by issuing Oil Bonds of Rs 1.44 lakh crores.
She was quoted as saying, “I can't go by the trickery that was played by previous UPA government. Due to Oil Bonds, the burden has come to our government, that's why we are unable to reduce prices of petrol and diesel,” news agency ANI reported.
The Congress-led UPA government had issued bonds to state-owned oil companies in order to make up for the difference in the artificially suppressed retail selling price of fuel and the cost.
Sitharaman claimed that the current government has paid over Rs 70,195 crores in interest in the last 5 years on oil bonds.
She added, “We'll still have to pay interest of Rs 37,000 crores by 2026. Despite interest payments, principal outstanding of over 1.30 lakh crores is still pending,” ANI reported.
Saying that people are right to be concerned, the Union Finance Minister stressed on the need for the Centre and states to discuss a way out, without which 'there is no solution possible to this'.
“If I didn't have the burden of oil bonds, I would have been in a position to reduce excise duty on fuel."Finance Minister Nirmala Sitharaman, as quoted by PTI.
Retrospective Tax
The Rajya Sabha passed Taxation Laws (Amendment) Bill, 2021, to undo the retrospective tax provision that were introduced in 2012, in view of India’s tax dispute with oil and gas firm Cairn Energy.
Referring to the same, Sitharaman said that rules for scrapping of retrospective tax will be framed soon. Moreover, she said, finance ministry officials are talking to Cairn and Vodafone on closure of retro tax cases, refund and settlement.
Meanwhile, referring to the glitches in the new income tax portal, Sitharaman said that they 'are expected to be fixed entirely in the next 2-3 weeks', news agency PTI reported.
Commenting on inflation, Sitharaman said that she expected inflation to remain contained within target band of 2 to 6 percent.
Moreover, revenue is expected to be buoyant in the coming months, while demand is also expected to pick up, Sitharaman said, PTI reported.
(With inputs from ANI and PTI)
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