The central government’s mop-up from excise duty levied on petrol and diesel more than doubled to ₹3.72 lakh crore in the pandemic year 2020-21, out of which states were given less than ₹20,000 crore, according to a reply by the government in the Rajya Sabha on Tuesday.
Minister of state for finance Pankaj Chaudhary in a written reply to a question stated that collection from levy of central excise duty on petrol and diesel increased from ₹1.78 lakh crore in 2019-20 to ₹3.72 lakh crore in 2020-21 (April 2020 to March 2021).
The increase in the collection was mainly on account of rise in the incidence of taxation on fuels.
Total excise duty on petrol was ₹19.98 per litre in 2019 and ₹15.83 a litre on diesel. The government raised excise duty twice last year to ₹32.98 per litre on petrol and to ₹31.83 on diesel.
The duty was moderated to ₹32.90 a litre on petrol and ₹31.80 on diesel in the budget this year. And it was cut by ₹5 a litre on petrol and ₹10 per litre on diesel this month after retail prices jumped to record high across the country.
“The total amount of tax devolved to state governments from the corpus collected under the central excise duty in FY 2020-21 was ₹19,972 crore,” Chaudhary said.
While the total incidence of excise on petrol currently is ₹27.90 a litre and that on diesel is ₹21.80, states are entitled to get a share only from the basic excise duty.
Out of the total incidence of taxation, the basic excise duty on petrol is ₹1.40 a litre. On top of this, special additional excise duty is levied of Rs 11 and a road and infrastructure cess of ₹13 a litre. A ₹2.50 agriculture infrastructure and development cess is levied on top of this.
Similarly, on diesel, the basic excise duty is ₹1.80 a litre. ₹8 per litre each is charged as special additional excise duty and road and infrastructure cess while a ₹4 per litre agriculture infrastructure and development cess is also levied.
“Devolution to state governments is made out of the basic excise duty component on the basis of the formula prescribed by the Finance Commission from time to time. At present, the rate of basic excise duty is ₹1.40 per litre on petrol and ₹1.80 per litre on diesel,” he said.
Total excise collection from fuel was ₹2.22 lakh crore in 2016-17, which inched up to ₹2.25 lakh crore in the following year but fell to ₹2.13 lakh crore in 2018-19.
Petrol and diesel is currently not under the Goods and Services Tax (GST) regime and states levy VAT on top of the excise duty charged by the centre.
“The total amount of tax collected under VAT on fuel across various states from April 2016 to March 2021 is ₹9.57 lakh crore,” he said.
This compares to ₹12.11 lakh crore collected by the central government during the same five year period, according to the minister’s reply.
