Petrol and Diesel prices are rising due to increased pressure on crude prices in global markets. Central government gave a breather to citizens with an excise duty cut of Rs. 2 per litre on Petrol and Diesel.
Central excise duty on Petrol and Diesel reduced by Rs 2 per Litre effective October 4, 2017 https://t.co/PzkGISV568
— PIB India (@PIB_India) October 3, 2017
What will be the Cost to Government?
Currently petrol and diesel prices in Delhi stands at Rs. 70.83/litre and Rs. 59.07/litre respectively. The rising prices impacted the pockets of common man and this was clearly visible in the inflation index.
Government estimated a revenue loss of Rs. 26000 crores on account of this relaxation. This revenue loss for remaining current fiscal year would mount to approx. Rs. 13000 crores. This step will definitely impact the planned revenues of the finance budget and contribute to fiscal deficit.
Its State Government’s turn now?
Central government has taken the first step and now its state government’s turn now to reciprocate and give cushion to the citizens. State governments had blocked the movement of petrol diesel products in to GST regime therefore its their moral responsibility to pass on the benefit to the citizens especially states like Madhya Pradesh who are charging comparatively higher VAT on Petroleum products.
Whatever the future course may be, we shall enjoy this interim relief and expect that soon petroleum products move under GST regime.