Excise mop-up surges 48% in first four months of fiscal
NEW DELHI: The government’s collections from levy of excise duty on petroleum products have jumped 48% in the first four months of the current fiscal year, with the incremental mop-up being 3-times of the repayment liability of legacy oil bonds in the full fiscal, official data showed.
Data available from the Controller General of Accounts in the Union ministry of finance showed excise duty collections during April-July 2021 surging to over ₹1 lakh crore, from ₹67,895 crore mop-up in the same period of the previous fiscal.
After the introduction of the Goods and Services Tax (GST) regime, excise duty is levied only on petrol, diesel, ATF and natural gas. Barring these products, all other goods and services are under the GST regime.
The incremental collections of ₹32,492 crore in the first four months of the fiscal year 2021-22 (April 2021 to March 2022) is three-times the ₹10,000 crore liability that the government has in the full year towards repayment of oil bonds that were issued by the previous Congress-led UPA government to subsidise fuel.
Bulk of excise duty collection is from the levy on petrol and diesel and with sales picking up with a rebounding economy, the incremental collections in the current year may be over ₹1 lakh crore when compared with the previous year, industry sources said.
In all, the UPA government had issued ₹1.34 lakh crore worth of bonds (equivalent to a sovereign commitment to pay in future) to state-owned oil companies to compensate them for selling fuel such as cooking gas LPG, kerosene and diesel at rates below cost.
Of this, ₹10,000 crore is due to be repaid in the current fiscal, according to the finance ministry.
First, finance minister Nirmala Sitharaman and then oil minister Hardeep Singh Puri had blamed the oil bonds for limiting fiscal space to give relief to people from fuel prices trading at near record high.
Finance minister Sitharaman had last month ruled out a cut in excise duty on petrol and diesel to ease prices, saying payments in lieu of past subsidised fuel pose limitations. She put the total liability that the BJP government has to service at ₹1.3 lakh crore.