Govt amends law to get power to hike tax on petrol, diesel by Rs 8 per ltr

On Monday, the government amended the law to obtain enabling powers in the future to increase excise duties on gasoline and diesel by 8 rupees per liter.

Finance Minister Nirmala Sitharaman has proposed an amendment to the finance bill for 2020 to raise the limit up to which the government can raise special excise duties on gasoline and diesel to Rs 18 per liter and Rs 12, respectively.

The amendment as well as the finance bill were adopted without debate at the Lok Sabha.

On March 14, the government raised excise duties on gasoline and diesel by 3 rupees per liter to increase rupees 39,000 crores in additional income per year. This duty increase included an increase of 2 rupees per liter of special additional excise duties and 1 rd by road and infrastructure.

This increase brought the special additional excise duty to the maximum allowed by law – Rs 10 for petrol and Rs 4 for diesel.

Now, thanks to an amendment to the eighth annex to the finance law, this limit has been increased to Rs 18 per liter for petrol and Rs 12 for diesel.

This is an enabling provision and no changes to excise duties are underway at this time, said an official.

The amendment gives the government the power to increase the duty up to 8 rupees per liter of gasoline and diesel at any time.

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