Revenue secretary Ajay Bhushan Pandey says excise duty hike on crude needs ‘analysis’

By: |
Mumbai | December 3, 2018 5:28 PM

Last week media reports said every Re 1 cut in the excise duty results in a Rs 14,000 crore hit on the government coffers and that given the falling crude prices it revert to the duty structure to pre-October levels.

According to the report, the Centre is looking at a hike of Rs 1-2 on excise on oil products. (Representational photo)

Revenue secretary Ajay Bhushan Pandey Monday declined to comment on reports of government planning an excise duty hike on petroleum products following fall in crude prices, saying an “analysis” is required on it.

In face of mounting public pressure, the Centre had in October cut excise duty by Rs 1.50 per litre on both petrol and diesel after a rally in global crude prices and also asked oil marketing companies to lower the retail prices by Re 1 each. It was emulated by some states, mostly BJP-ruled states.

However, crude prices have corrected by over 30 per cent since then to under USD 60 a barrel levels, which has lowered fuel prices correspondingly and technically made space for a review. But retail price can still come down by over Rs 4 a liter, according to many analysts.

“At this point in time I will not be able to say anything. These things require certain analysis. Off the cuff it will not be appropriate to say anything,” Pandey told reporters when asked if government is planning such a move.

Last week media reports said every Re 1 cut in the excise duty results in a Rs 14,000 crore hit on the government coffers and that given the falling crude prices it revert to the duty structure to pre-October levels.

It can be noted government has already fiscal deficit target by October at 103.9 percent and many analysts have warned of fiscal slippages beyond the committed 3.3 per cent.

According to the report, the Centre is looking at a hike of Rs 1-2 on excise on oil products.

Meanwhile, when asked about a shortfall in GST collection, Pandey acknowledged that there has been a Rs 4,000-crore decline in November, but stressed that it cannot be extrapolated into a trend.

“In November we got Rs 4,000 crore less, but you have to see a long-term trend. Like in the previous month, we had collected over Rs 1,00,000 crore. This month we have collected Rs 97,000 crore,” he said.

Addressing the 80th World Customs Organisation (WCO) Policy Commissionerate meeting, Pandey said India is at the cusp of a transformation following GST rollout.

Chairman of the Central Board of Indirect Taxes and Customs S Ramesh said the country has committed Rs 5 crore to enhance the expertise of WCO, making it the maiden contribution.

He said economic frauds need to be dealt with severely but admitted that enforcement is a challenge.

Pranab Kumar Das, member (customs) at the CBIC, said the directorate of revenue intelligence (DRI) is active on curbing smuggling and signing pacts with countries to get hold of passengers’ list in advance so as to have a better profile of the travellers.

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