Excise duty collection has jumped 48% in the current fiscal due to a record increase in taxes on petrol and diesel. Excise duty collection during April-November 2020 stood at Rs.1.96 lakh crore, up from Rs.1.33 lakh crore during the year ago period, official data showed. over 10 million tonnes less diesel was sold during April-November 2020 as against the previous year.
Diesel sales during April-November 2020, stood at 44.9 million tones as compared to 55.4 million tonnes a year back, according to data from the oil ministry’s Petroleum Planning and Analysis Cell (PPAC).
Petrol consumption too was lower at 17.4 million tones, compared to 20.4 million tonnes during April-November 2019.
While Goods and Services Tax (GST) apply on most products since its introduction in 2017, oil products and natural gas has been kept out of its preview. Excise duty, which accrues to the Centre , and VAT that goes to the state government, are levied on their sale.
While the pandemic pummeled tax collection across the board, excise duty mop-up jumped 48 per cent in the current fiscal on the back of a record increase in taxes on petrol and diesel, that more than made up for the below normal fuel sales. Excise duty collection during April-November 2020, was at Rs 1,96,342 crore, up from Rs 1,32,899 crore mop-up during the same period in 2019, according to data from the Controller General of Accounts (CGA).
In May that year, the government hiked excise duty on petrol by Rs 10 per litre and that on diesel by Rs 13 a litre. While basic excise duty on crude is not so significant, it is ad valorem (a certain percentage of value) on ATF at 11 per cent and on natural gas-compressed 14 per cent.
In case of an ad valorem system, earnings happen only if the product price goes up. According to CGA, over tax revenue of the government is down 45.5 per cent at Rs 688,430 crore during April-November 2020.
For the full 2020-21 fiscal (April 2020 to March 2021), the government had budgeted Rs 16.35 lakh crore tax revenue. Corporation tax mop-up is down 35 per cent at Rs 185,699 crore and income tax collection is 12 per cent lower at Rs 235,038 crore, the CGA data showed.