Petro tax review ordered to verify OMC loss figures
The department of economic affairs, the finance ministry’s wing that anchors the Budget-making exercise, has asked a leading city-based public finance and policy think tank to study existing taxes on petroleum products and make recommendations, said a ministry official, who asked not to be named.
The need for a review of fuel taxes was recommended to the ministry by the parliamentary standing committee on finance chaired by the BJP's Yashwant Sinha. Sinha said at an Indian Express Idea Exchange programme on Thursday that the committee had appreciated a “very, very informed” report on the subject prepared by a similar parliamentary panel on petroleum. The former finance minister said the standing committee on finance has already had a round of discussion on the subject with finance ministry officials. “We have decided that in our next sitting, the ministry of petroleum officials would also be there so that we could jointly discuss it with them,” said Sinha.
On the one hand, the government gives huge cash compensation to state-run oil companies for selling fuel at regulated prices and, on the other, it collects hefty taxes on fuel. In fact, the central and state governments combined collected R2.25 lakh crore from the petroleum sector in 2010-11, while the central government gave cash compensation of
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