The Indian Foundation of Transport Research and Training has urged the Centre to rationalize the duty and tax structure on petroleum products as the present structure has resulted in large scale adulteration of diesel by kerosene.
It has also asked the government to levy excise duty on light diesel at par with that of HSD. Light diesel was being diverted and sold in the market as high speed diesel though there were differences in technical specifications. Levies on light diesel were lower than HSD.
The parallel marketing scheme of kerosene gave massive price benefit to kerosene against diesel. To check adulteration of diesel with kerosene, the excise duty and countervailing duty would have to be increased from 16 per cent to 32 per cent on PMS kerosene. Import of PMS kerosene has doubled to 0.5 million tonnes in one year.
S P Singh, coordinator of IFTRT, said, "Today almost two-thirds of kerosene was being diverted to truckers, and was being used to bring down high cost of operations owing to falling freight rates. Some retail outlets mix kerosene with diesel to increase profits."
The existing taxation structure encouraged adulteration as import duty on PMS kerosene and diesel was equal at 20 per cent.
"Added to this, excise duty on diesel on ad-valorem rate comes to 21.4 per cent and that is higher than 16 per cent levy on PMS kerosene," Singh added.
