New Delhi: The government has denied the excise duty cuts currently on petrol, diesel. A senior officer said this on Monday. He says that the Central and some State Governments are not in a position to take such a step and raise the potential revenue deficit from them.
Next meeting of GST Council on 28th September but not price of petrol and diesel in agenda
At the same time, the next meeting of the GST Council is scheduled on 28th September but the agenda of the meeting is not the price of petrol and diesel. That is, the government is not upset about the price protests. However, sources of the Finance Ministry have made it clear that there is no intention of reducing excise duty from petrol and diesel right now. In fact, the government believes that the impact of reduction in excise duty can be on the work of development.
State governments are also not in favor of bringing GST
Not only that, the demand of the petrol and diesel to be included in the GST but the ministry’s attitude is not positive. According to sources, there is no state government in favor of bringing petrol and diesel to the realm of GST. States feel that bringing under GST will have an adverse effect on their earnings, while their gardener’s condition is not well enough. It does not seem that people will get relief at the moment.
The senior official said on condition of anonymity that the excise duty reduction would affect the fiscal deficit of the center whereas there are some states like Bihar, Kerala and Punjab that are not in a position to reduce sales tax or VAT on these fuels. Government believes that the price of crude oil in the international market will be lower in the coming days. Due to rising prices of crude oil and decreasing the exchange rate of rupees against the dollar, prices of petrol and diesel are touching new heights these days.
Petrol-diesel price rises till now
This comment has been made by the government official at a time when all the opposition parties in the leadership of the Congress have organized a nation-wide shutdown against petrol and diesel prices. Petrol price in Delhi has reached the highest level of Rs 80.73 per liter so far, while the price of diesel has reached a new height of Rs 72.83 per liter. It is noteworthy that in Delhi petrol and diesel prices are the lowest in comparison to the other metros of the country, because VAT is the lowest in Delhi, which is the lowest VAT on these fuels.
The prices of two states reduced
The official said that the consumers who consume petrol, diesel, should pay the price. Although, on Sunday, Rajasthan has announced a four per cent reduction in VAT rate on petrol and diesel, while Andhra Pradesh has cut the sale tax on Monday and cut its price by two rupees each.
The official said, “Tax cuts on petrol, diesel will increase fiscal deficit. At the central level, the situation of fiscal deficit determines the yield in the bond market. The rupee will also be weak due to the increase in the fiscal deficit. “He said,” With the reduction in taxes, you will have to cut the expenditure on development activities. This will be the biggest blow to the tax deduction.
Reduction in revenues
The official said that relief in this case can be given only when the financial position of the government is strong. States do not have enough capacity to reduce tax rates. The reduction of one rupee per liter in petrol and diesel tax reduces the revenue of Rs 30,000 crore annually.
He said, “We will be able to cut tax on petroleum products only if compliance is better in case of income tax and GST. As long as this situation is not created, our oil dependence will be dependent on income from tax. “Petrol and diesel prices are in the fastest since mid-August. Their prices are increasing daily by rising crude oil prices and falling rupee exchange rates. Meanwhile, the price of petrol has increased by Rs 3.65 a liter and the price of diesel has been increased by Rs 4.06 per liter. This is the biggest increase in any month since mid-June last year when the amendment was started on daily basis.