The union government on Tuesday (5 May) increased excise duties on petrol and diesel by Rs 10 per litre and Rs 13 per litre, respectively. The changes came into force today (6 May).
However, according to a report by the Economic Times, officials claimed that the increase in tax will not change the fuel prices for retail customers.
The duty hike has come at a time when global crude oil rates are relatively as low as $23.86 per barrel, when compared to peak level prices. The government has used the opportunity to raise revenue that has been severely impacted by the Covid-19 related lockdown.
The government has raised the additional excise duty in the form of road cess on petrol and diesel by Rs 8 per litre.
It has also raised special additional excise duty on petrol by Rs 2 per litre and diesel by Rs 5 per litre. The centre would, however, get a tax bonanza and gain in excess of Rs 1,75,000 crore for full year.
As per a notification issued by Central Board of Indirect Taxes and Customs, the new rates are effective from 6 May.
Government sources said that revenue generated from these duties shall be used for infrastructure and other developmental item of expenditure and could handy for any economic package that may be needed to fight the lockdown imposed to check Covid-19 spread.
Oil companies were building the buffer by not revising petrol and diesel prices for last over 50 days though prices were falling.
(With inputs from IANS)
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