The Union government will gain close to Rs 1.6 lakh crore in additional revenues this fiscal from a record hike in excise duty on petrol and diesel that has pushed the total incidence of taxation on auto fuels to 70 per cent of the price. Late on Tuesday evening, the government hiked excise duty on petrol by Rs 10 per litre and that on diesel by Rs 13 a litre to mop up gains arising from international oil prices falling to a two-decade low.
India Ratings and Research predicts the Reserve Bank of India (RBI) will maintain the repo rate at 5.25 per cent throughout FY27, despite potential inflationary pressures from higher fuel prices, with inflation expected to remain within the central bank's tolerance band.
'PM Modi is trying to reduce the volume of fuel consumed instead of raising prices sharply.'
Petrol and diesel will cost Rs 2 a litre less from Wednesday after the first excise duty cut by the Modi government comes into effect.
Finance Minister Pranab Mukherjee on Monday retained the rate of standard excise duty at 10 per cent in the Budget for 2011-12, giving a little respite to industry, which feared a rollback of stimulus measures.
A government official said out that with hardly any economic activity, an immediate duty hike will not be productive and could be announced once the lockdown eases and demand revives.
Most of the bullion markets and jewellery showrooms remained closed in major cities.
The international crude oil price of Indian Basket was $60.10 (Rs 3,765.27) per barrel on December 15, down from $60.58 (3,782.62) per bbl on December 12.
India's largest private refiner, Reliance Industries Ltd, successfully navigated a volatile energy market in the last quarter of FY26 by diversifying crude sourcing and demonstrating operational agility, particularly in response to geopolitical disruptions and cost fluctuations.
Urban markets account for the major share of total revenues.
Common return for excise duty and service tax was envisaged when 119 services were taxed.
The auto industry body has been lobbying hard with the government for extension of the reduced excise rates.
Petroleum Minister Ram Naik is likely to meet Finance Minister Jaswant Singh on January 30 to seek excise duty cut on petroleum products in view of excessive volatility in international crude oil prices.\n\n\n\n
Petrol and diesel prices in India have been increased for the second time in a week, following a long freeze on revisions. The increase comes as global crude prices surge and state-run oil firms look to recoup losses.
The strike entered the 15th day on Wednesday.
While there is widespread expectation that excise duty is likely to be raised on revenue considerations, the fast moving consumer goods (FMCG) sector pleads for retaining them at current levels to spur demand.
Air India and Air India Express are introducing a fuel surcharge on domestic and international flights due to rising jet fuel prices, impacting travel costs for passengers.
"There is a lot of opposition from the garment industry, but we are not in favour of a complete rollback of the duty. We understand their concerns and will try to address these. We may simplify some procedures for them," said a finance ministry official.
Finance Minister Arun Jaitley in the Budget for 2016-17 had proposed 1 per cent excise duty on jewellery without input credit or 12.5 per cent with input tax credit on jewellery.
Concerned over the downturn in the automobile industry, Heavy Industries Minister Vilasrao Deshmukh has asked the Finance Minister to cut excise duty on big passenger cars by more than half to 8 per cent.
Petrol and diesel prices in India have been increased by Rs 3 per litre each, marking the first rate hike in over four years. This decision follows a period of stable prices during recent state elections, despite rising global crude oil prices and significant losses for fuel retailers.
The Comptroller and Auditor General (CAG) of India has criticized the Maharashtra state excise department for operational lapses that led to a significant revenue shortfall. The report cites incorrect fee assessments, failure to implement revised rates, and other irregularities.
Petrol and diesel prices have been increased by Rs 3 per litre each, marking the first hike in over four years, as state-run fuel retailers pass on some of the impact from surging global crude prices, which have been exacerbated by the Iran war.
Excise duty on drugs likely to be halved
A prolonged supply shock can transmit to lower incomes, and dampen confidence and sentiment, warns Aditi Nayar, chief economist, head-research and outreach, ICRA.
The case relates to alleged wrong classification of mixed xylene
As many as 379 cases of central excise duty evasion were registered in 2013-14.
Higher input cost is likely to weigh on Auto sector's Q4 numbers.
The fall in cement prices and improving demand together add cream to the cement product sector, who seek status quo on excise duty and service taxes.
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The government on Tuesday raised excise duty on petrol by Rs 2.25 per litre and by Re 1 a litre on diesel but retail pump rates will not be increased as oil firms decided to absorb the duty change for the time being.
It argued that the duty reduction will not lead to revenue loss for the government.
The Indian Textile Industry is currently one of the largest and most important industries in the Indian economy in terms of output, foreign exchange earnings and employment.
Oil Minister S Jaipal Reddy has written to Finance Minister Pranab Mukherjee demanding a hike in excise duty on diesel cars to make up for subsidised fuel being used in vehicles.
Passenger Vehicle sector seeks cut in excise duty on large cars too, and to reduce interest on auto loans to boost demand
The hike in excise duty has only added on to their woes. However, with nil action on diesel vehicles, the demand for passenger vehicles will be strongly skewed.
Petrol prices on Thursday crossed Rs 73 a litre mark, the highest level since the BJP government came to power in 2014, while diesel touched a record high of Rs 64.11 a litre.
Announcement of an increase in prices will dampen the affordable housing business at a time when realtors already face razor-thin margins.
Govt hikes excise duty on petrol, diesel to mop up Rs 2.5K-cr.
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