Central government revenue through levy of excise duty on petrol/diesel has more than doubled in the two-year period between 2013-14 and 2015-16 owing to this increase.
Excise Duty on Diesel Increased from Rs 3.56 to Rs 17.33 in 3 Years
The excise duty on unbranded diesel was Rs 3.56 per litre on 1st April, 2014 just before the BJP came to power. The excise duty on unbranded petrol was Rs 9.48 per litre on the same date.
Since then, it has been revised 11 times. From Rs 3.56 per litre, the excise duty on diesel increased to Rs 17.33 per litre, an increase of over 380% in 3 years. In the case of petrol, it increased from Rs 9.48 per litre to 21.48 per litre.
On four different occasions, the excise duty on diesel was increased by Rs 2 or more per litre while on petrol, it was increased by Rs 2 or more per litre on three different occasions.
Even States Increased VAT/Sales Tax on Petrol and Diesel
It is not just the central government that increased the excise duty, even state governments have increased VAT/Sales tax on petrol and diesel in the last 3 years. The VAT on diesel was more than 20% in only 10 states in April 2014. As of March 2017, the VAT on diesel is more than 20% in 16 different states. The highest VAT percentage on diesel was 25% in Chhattisgarh in April 2014.
As of March 2017, the highest VAT percentage on diesel is 31.31% in Madhya Pradesh. The VAT on petrol was at least 25% in 17 different states in April 2014. It is now at least 25% in 25 different states. The highest VAT on petrol was 33.06% in Punjab in April 2014. As of March 2017, the highest VAT percentage is 39.75% in Madhya Pradesh.
Revenue Through Excise Duty Has More Than Doubled in 2 Years
Central government’s revenue through excise duty on petrol and diesel has more than doubled from 2013-14 to 2015-16. From Rs 77,982 crore in 2013-14, the excise duty collection on petrol and diesel increased to Rs 178,591 crore in 2015-16.
The 2016-17 collection are on course to surpass the previous year, going by the collection figure of the first 9 months. The VAT/sales tax collection on petrol and diesel increased only marginally in the states. From Rs 129045 crore in 2013-14, it increased to Rs 142848 in 2015-16. Though the VAT percentage on both petrol and diesel has been increased by many states in the last 3 years, the VAT collection in states have not increased proportionally since the base price of petrol and diesel has substantially decreased in the last 3 years on account of reduction in global crude oil prices.
Only 4 States Earn More Than 10,000 Crore Through VAT on Petrol and Diesel
Of all the states, Maharashtra earns the maximum revenue through VAT on petrol and diesel. Maharashtra has consistently earned more than Rs 19,000 crore since 2013-14. Only four states (Maharashtra, Gujarat, Uttar Pradesh and Tamil Nadu) have earned more than Rs 10,000 crore through VAT on petrol and diesel in each of the years since 2013-14. Andhra Pradesh before bifurcation into Telangana and Andhra Pradesha also used to earn more than Rs 10,000 crore.
The total contribution of petroleum products to the central and state exchequer has crossed Rs 4 lakh crore in 2015-16. Out of the 4 lakh crore in 2015-16, central excise duty and state VAT account for more than 3.2 lakh crore. Even in 2016-17, the total contribution is set to cross Rs 4 lakh crore.
(Article published in arrangement with Factly.in)
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