Branded diesel’s excise duty structure changed, retail prices not to be affected

BRANDED DIESEL WILL NOW BE CHARGED AT 14% OF THE REFINERY GATE PRICE PLUS `5 PER LITRE, OR `10.25, WHICHEVER IS LOWER

NEW DELHI: The government has changed the excise duty structure on branded or premium diesel, shifting from fixed rates to a combination of ad valorem and fixed duty.

Branded diesel will now be charged at 14% of the refinery gate price of the fuel plus `5 per litre, or `10.25, whichever is lower, according to a notification issued by the finance ministry’s department of revenue.

The duty shift will not result in any change in retail prices.

The fuel, which is sold under brands ‘XtraMile’ by Indian Oil Corp (IOC), ‘Hi Speed Diesel’ by Bharat Petroleum Corp Ltd (BPCL) and ‘Diesel Super’ and ‘Turbo Jet’ by Hindustan Petroleum Corp Ltd (HPCL), till now attracted a total excise duty of `10.25 per litre.

The specific excise duty rates for unbranded or normal diesel as well as unbranded and branded petrol have not been changed, and will continue to be charged at specific rates. Originally, excise duty on petrol and diesel was ad valorem. This was changed to specific rates, as with every increase or decrease in prices, the incidence of duty also changed, thereby impacting the pump rates.

With global-oil prices slumping to near six-year lows of about $44 per barrel, the government has raised excise duty on both petrol and diesel on four occasions since November to mop up an additional `18,000-20,000 crore this fiscal without impacting the consumer.

Currently, unbranded or normal petrol is charged with a total of `16.95 per litre.