The Centre’s collections from the levy of excise responsibility on petroleum merchandise have surged 48% within the first 4 months of the present fiscal yr.
With this the incremental mop-up has been thrice the compensation legal responsibility of legacy oil bonds in the entire fiscal, official information revealed.
Information compiled by the Controller Common of Accounts within the Union finance ministry displayed that excise responsibility collections between April-July 2021 soared to greater than Rs 1 lakh crore, from Rs 67,895 crore mopped up in the identical interval of the earlier fiscal.
Additionally Learn: Over Rs 1.5 lakh cr UPA-era oil bonds have to be repaid: Petroleum Minister
Following the introduction of the GST regime, excise responsibility is imposed on air turbine gas (ATF), petrol, diesel, and pure fuel. Excluding these merchandise, all different items and companies fall underneath the GST regime.
The incremental collections of Rs 32,492 crore within the first 4 months of the fiscal yr 2021-22 (April 2021 to March 2022) is three-times the Rs 10,000 crore legal responsibility that the federal government has within the full yr in the direction of compensation of oil bonds that had been issued by the earlier Congress-led UPA authorities to subsidise gas.
The majority of excise responsibility assortment is from the levy on petrol and diesel and with gross sales selecting up with a rebounding financial system, the incremental collections within the present yr could also be over Rs 1 lakh crore when put next with the earlier yr, business sources stated.
In all, the UPA authorities had issued Rs 1.34 lakh crore value of bonds (equal to a sovereign dedication to pay in future) to state-owned oil corporations to compensate them for promoting gas akin to cooking fuel LPG, kerosene and diesel at charges beneath value.
Of this, Rs 10,000 crore is because of be repaid within the present fiscal, based on the finance ministry.
First, Finance Minister Nirmala Sitharaman after which Oil Minister Hardeep Singh Puri had blamed the oil bonds for limiting fiscal house to provide aid to folks from gas costs buying and selling at a near-record excessive.
Sitharaman had final month dominated out a minimize in excise responsibility on petrol and diesel to ease costs, saying funds in lieu of previous subsidised gas pose limitations. She put the whole legal responsibility that the BJP authorities has to service at Rs 1.3 lakh crore.
Additionally Learn: Govt’s earnings from excise responsibility on petroleum merchandise leap to Rs 3.36 lakh cr in FY21
On September 2 – a day after Congress chief Rahul Gandhi launched a scathing assault on the federal government for elevating cooking fuel costs – Puri put the whole legal responsibility at over Rs 1.5 lakh crore.
“In ”India’s Misplaced Decade” recognized for rampant impunity & coverage paralysis, UPA Govt saddled future governments with Oil Bonds. Greater than Rs 1.5 lakh crore of those stay to be repaid, thus tying up essential sources, limiting fiscal house & proscribing monetary freedom of OMCs,” he had tweeted.
Puri, a 1974 batch Indian International Service officer who served because the Everlasting Consultant of India to the United Nations from 2009 to 2013, went on to say that the exploration and manufacturing (E&P) sector was “fund-starved”.
“The essential E&P sector was fund-starved. Because of this, our import invoice continues to be excessive. Practically Rs 3.6 lakh crore earnings of oil corporations had been as a substitute used for worth stabilisation by a remote-controlled govt of ”financial specialists” to cover behind a ”All is Effectively” smokescreen,” he had tweeted.
The majority of the excise collections comes from petrol and diesel on which the Modi authorities had levied document taxes final yr.
Excise responsibility on petrol was hiked from Rs 19.98 per litre to Rs 32.9 final yr to recoup acquire arising from worldwide oil costs plunging to multi-year low as pandemic gulped demand.
Petrol and diesel in addition to cooking fuel and kerosene had been offered at subsidised charges through the earlier Congress-led UPA authorities.
As a substitute of paying for the subsidy to carry parity between the artificially suppressed retail promoting worth and the associated fee that had soared due to worldwide charges crossing $100 per barrel, the then authorities issued oil bonds totalling Rs 1.34 lakh crore to the state-fuel retailers.
These oil bonds and the curiosity thereon are being paid now.
Of the Rs 1.34 lakh crore of oil bonds, solely Rs 3,500 crore of principal has been paid and the remaining Rs 1.3 lakh crore is due for compensation between this fiscal and 2025-26, based on data made accessible by the finance ministry.
The federal government has to repay Rs 10,000 crore this fiscal yr (2021-22). One other Rs 31,150 crore is because of be repaid in 2023-24, Rs 52,860.17 crore within the following yr and Rs 36,913 crore in 2025-26.
Minister of State for Petroleum and Pure Gasoline Rameswar Teli had in July instructed Parliament that the Union authorities’s tax collections on petrol and diesel jumped by 88 per cent to Rs 3.35 lakh crore within the yr to March 31, 2021 (2020-21 fiscal) from Rs 1.78 lakh crore a yr again.
Excise assortment in pre-pandemic 2018-19 was Rs 2.13 lakh crore.
The hike in taxes final yr didn’t end in any revision in retail costs as they bought adjusted towards the discount that was warranted due to the autumn in worldwide oil costs.
However with the demand returning, worldwide oil costs have soared, which have translated to document excessive petrol and diesel costs throughout the nation. Greater than half the nation has petrol at over Rs 100-a-litre mark and diesel is above that stage in Rajasthan, Madhya Pradesh and Odisha.
The charges weren’t minimize drastically when worldwide oil costs fell from $77 a barrel to underneath $65.
Petrol has been minimize from a peak of Rs 101.84 a litre in Delhi to Rs 101.19 whereas diesel charges have declined to Rs 88.62 a litre from 89.87. LPG charges have been hiked by Rs 190 per cylinder since July.
Trade sources stated the federal government had ordered a pause on charges through the meeting elections in states akin to West Bengal. That pause meant that the retail costs didn’t rise in step with value and now the oil corporations are recouping their losses when charges have fallen.
(With inputs from PTI.)