Excise duty was raised by Rs 13 and Rs 16 per litre on petrol and diesel between March 2020 and May 2020, and now stands at Rs 31.8 on diesel and Rs 32.9 per litre on petrol.
There have been calls by opposition parties as well as sections of society to the government to reduce excise duty to ease consumer pain.
The State government is likely to exempt alcohol from any fresh taxes or hike in duty in the forthcoming Budget.
Finance Ministry data showed that the overall GST collection from these products, including cess, during FY 2019-20 was Rs 53,540 crore and excise collection Rs 1,610 crore.
The government had raised excise duty on petrol by Rs 13 per litre and that on diesel by Rs 16 a litre in two tranches to mop up gains arising from international crude oil prices falling.
Though Covid-19 cases have come down, the government wants the continuation of SED, perhaps to keep tourist inflow at a minimum.
While finance secretary Hasmukh Adhia on Monday ruled out any immediate reduction in excise duty, sources told TNIE that the option is still open.
Arun Jaitley provided no indication today of any cut in excise duty on petrol and diesel to cushion the spike in rates, saying that the government needs revenue to support public spending.