OIL PRICES: A BURN­ING IS­SUE

India Today - - INSIDE - By M.G. Arun

In June this year, when fuel prices in In­dia shot up af­ter global crude prices crossed $80 a bar­rel, Union min­is­ter for oil Dhar­men­dra Prad­han said there was lit­tle that the cen­tral gov­ern­ment could do, but states should look at low­er­ing the value added tax (VAT) on fuel. He also said that petrol and diesel needed to be brought un­der the Goods and Ser­vices Tax (GST) if their prices needed to be low­ered. Three months later, the is­sue of high fuel prices has boiled over, with the Con­gress call­ing for a na­tion­wide bandh on Septem­ber 10, even as prices of petrol touched Rs 88.21 a litre and diesel Rs 77.41 in Mum­bai. The bandh saw spo­radic vi­o­lence in a few states, but again it seemed the Cen­tre could do pre­cious lit­tle to lower fuel prices. That is, if it had any in­ten­tion of do­ing so at all.

The rea­son for this is not hard to find. Tra­di­tion­ally, ex­cise du­ties and VAT on fuel have been ma­jor sources of rev­enue for the cen­tral and state gov­ern­ments. In 2017-18, the cen­tral gov­ern­ment earned rev­enues of Rs 2.84 lakh crore from taxes on petroleum and petroleum prod­ucts, while state gov­ern­ments col­lected Rs 2.09 lakh crore. Taxes from petroleum com­prise 36 per cent of the Cen­tre’s tax rev­enues and 20 per cent of states’ tax rev­enues. The cen­tral gov­ern­ment ex­cise rate is fixed at around Rs 20 a litre on petrol and Rs 15.25 on diesel. The VAT and sales tax rates vary, from 16 per cent in Goa to

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.