NEW DELHI: The current prices of petrol and diesel do not warrant an excise duty cut, according to oil minister Dharmendra Pradhan. Ruling out any such plan by the government in the immediate future, he said, “We will consider a revision when needed.”
Petrol and diesel prices have risen Rs 6.03 a litre and Rs 3.68 a litre, respectively, since July 1 in Delhi.
According to a report by Integrated Research and Action for Development (IRADe) titled ‘Converging the Divergence Between Diesel and Petrol Prices: A Case for Rationalisation of The Central Excise Duty’, both the Centre and states need to rationalise their share of tax on fuel before petrol and diesel can be brought under the goods and services tax regime.
“If the states were also to equalise their value-added tax (VAT) rates along with excise rates by the Centre, the combined impact on the change in diesel price varies from 6 per cent to 2 per cent across states,” it said.
It is difficult to arrive at an acceptable GST rate that protects states’ revenues due to varying tax incidence on fuel in the country, the report noted.
Speaking to reporters on the sidelines of a workshop on ‘Converging the Divergence between Diesel and Petrol Prices’ Pradhan, however, supported Finance Minister Jaitley’s view urging the states for a cut in the VAT. He said, “State governments should consider a cut in their share of tax revenues from petrol and diesel.”