New Delhi: Union Finance Minister Nirmala Sitharaman on Sunday clarified that the entire cost of reduction in excise duty on petrol and diesel will be borne by the central government and the move will not affect the state’s revenue.
In a tweet, the Finance Minister said, “Basic Excise Duty (BED), Special Additional Excise Duty (SAED), Road and Infrastructure Cess (RIC) and Agriculture and Infrastructure Development Cess (AIDC) together make up the excise duty on petrol and diesel. “
Basic excise duty is shareable with the states. Special additional excise duty, road and infrastructure cess, and agriculture and infrastructure development cess are non-shareable. On Saturday, the Finance Minister announced a cut in excise duty on petrol by Rs 8 per liter and on diesel by Rs 6 per liter. This reduction is in the special additional excise duty.
It is not shareable. So the entire burden is borne by the central government. In November 2021, the Prime Minister Narendra Modi government cut excise duty on petrol by Rs 5 per liter and on diesel by Rs 10 per liter. In November 2021, the fee was cut from the Road and Infrastructure Cess (RIC) category. According to the Finance Minister, the Central Government bears the entire cost of these two cuts in excise duty on petrol and diesel.
“The original ED which is shareable with the states has not been touched. Hence, the entire burden of these two duty cuts (done on November 21 and yesterday) is borne by the Centre,” Sitharaman said. said. The fee cut taken on Saturday has implications of Rs 1,00,000 crore annually for the Centre.
The fee cut done in November 2021 has implications of Rs 1,20,000 crore per year for the Centre. The finance minister said the total revenue implication to the Center on these two fee cuts is Rs 2,20,000 crore per annum.
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