On Diwali, Centre cuts excise duty on petrol by Rs 5 and diesel by Rs 10 per litre
New Delhi : To make Diwali more cheerful for the residents of India, the Central government announced a cut in excise duty on petrol and diesel by Rs 5 and Rs 10 per litre respectively.
The excise duty reduction is effective from November 4 when petrol price will come down from the current rate of Rs 110.04 a litre in Delhi to Rs 105.04. Diesel rate will be reduced from Rs 98.42 per litre to Rs 88.42.
"Government of India has taken a significant decision of reducing Central Excise Duty on petrol and diesel by Rs 5 and Rs 10 (per litre) respectively from tomorrow. Prices of petrol and diesel will thus come down accordingly," the finance ministry said in a statement.
This is the highest-ever reduction in excise duty and rolls back a part of the Rs 13 and Rs 16 per litre increase in taxes on petrol and diesel effected between March 2020 and May 2020 to avoid passing on to consumers the sharp fall in international oil prices.
That hike in excise duty had taken central taxes on petrol to their highest level of Rs 32.9 per ltire and that on diesel to Rs 31.8 a litre.
Finance Ministry also mentioned that they have asked states to reduce VAT on petrol and diesel so that more relief can be given to the consumers.
The continuously increasing fuel prices have been severely criticized by the Opposition parties, Congress in particular had been demanding a reduction in the excise duty.
Based on April to October consumption numbers, the loss of revenue to the government due to the excise duty cut will be Rs 8,700 crore per month. This totals to an annual impact of over Rs 1 lakh crore, industry sources said.