Every time fuel price rises both state and central Govt fill their exchequer by few thousand crore .
It is said that in democracy Government is by the people , for the people and of the people .But whenever world crude oil prices go up people has to pay both the rise in price of the petrol and diesel but also enhanced taxes on the higher prices . Why can not the Govt shake of its share of booty for the sake of its people . Moreover in view of the fact that contribution of the petroleum sector to the total net excise revenues of the government is about 40% Govt should not benefit itself from hike in petrol prices.
Its all because of the duty structure of petrol and diesel which is ad valorem plus specific duty .But it should be specific duty based on the quantity as per the recommendation of the Rangarajan Committee It recommended that a specific levy of Rs 14.75 per litre for petrol and Rs 5.00 per litre for diesel may be imposed.
Let us make a study of the scenario at Delhi before price hike . The consumer in Delhi was paying Rs 43.49 per litre .
Value of petrol = Rs 20 .42 Central Exicise =Rs 14.63 (8 per cent + Rs 13 as Specific duty per litter ) + Rs .30 edu cess = Rs 35 + Sales Tax @ 20% Rs 7.25 .Sales tax being charged over and above Central Excise duties a cascading effect is already there on the consumer and now after its like paying extra tax as sale tax that too over and above extra excise duties accrued on increased price .
It is clear from the above study that tax part is more than 100% but never the less no govt is ready to reconstruct the tax structure just to ensure that people is atleast relieved from extra burden of tax resulting from price hike .
How can in a democratic country like India Govt can afford to go on putting this unjustified burden on people .Moreover even if the tax is the one and only concern of the Govt then it is absolutely short sightedness on the part of Govt not to consider the its cascading impact on the over all economy of the govt. Fuel price hike directly increase the cost of transportation of goods and there by hit all industries alike .If the industry is hit Govt exchequer will be also be hit .
Tarun Majumder
Editor IndianTaxSolutions.com
Its all because of the duty structure of petrol and diesel which is ad valorem plus specific duty .But it should be specific duty based on the quantity as per the recommendation of the Rangarajan Committee It recommended that a specific levy of Rs 14.75 per litre for petrol and Rs 5.00 per litre for diesel may be imposed.
Let us make a study of the scenario at Delhi before price hike . The consumer in Delhi was paying Rs 43.49 per litre .
Value of petrol = Rs 20 .42 Central Exicise =Rs 14.63 (8 per cent + Rs 13 as Specific duty per litter ) + Rs .30 edu cess = Rs 35 + Sales Tax @ 20% Rs 7.25 .Sales tax being charged over and above Central Excise duties a cascading effect is already there on the consumer and now after its like paying extra tax as sale tax that too over and above extra excise duties accrued on increased price .
It is clear from the above study that tax part is more than 100% but never the less no govt is ready to reconstruct the tax structure just to ensure that people is atleast relieved from extra burden of tax resulting from price hike .
How can in a democratic country like India Govt can afford to go on putting this unjustified burden on people .Moreover even if the tax is the one and only concern of the Govt then it is absolutely short sightedness on the part of Govt not to consider the its cascading impact on the over all economy of the govt. Fuel price hike directly increase the cost of transportation of goods and there by hit all industries alike .If the industry is hit Govt exchequer will be also be hit .
Tarun Majumder
Editor IndianTaxSolutions.com
posted by TARUN MAJUMDER @ 5:06 PM
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