Centre to bear burden of duty cuts – FM

NewsGate Press Network

Finance Minister Nirmala Sitharaman on Sunday the 22^nd of May 2022 defended excise duty reduction of Rs 8 per litre on petrol and Rs 6 per litre on diesel stating that centre will bear the burden as the duty cuts has been has entirely been made in Road and Infrastructure Cess, a union government domain.

The Minister noted that duty cut on the key auto fuels in November 2021 was also entirely in Road and Infrastructure Cess.

“Basic excise duty which is sharable with states has not been touched. Therefore, the entire burden of these two duty cuts is borne by the Centre,” Sitharaman said.

Basic excise duty, special additional excise duty, road & infrastructure cess and agriculture & infrastructure development cess together constitute excise duty on petrol and diesel.

While basic excise duty is sharable with states, the other three levies are non-sharable.

On Saturday the 21^st of May 2022 the FM had announced duty reduction having implication of Rs 1 lakh crore a year for Centre. Further, she said that the duty reduction made in November’21 has an implication of Rs 1.2 lakh crore annually.

“Total revenue implication to Centre, on these two duty cuts is thus Rs 2,20,000 crore a year,” the Minister said.

Quoting data from Reserve Bank of India (RBI), Sitharaman said that total developmental expenditure incurred by the government during 2014-‘22 was Rs 90.9 lakh crore.