States can and must reduce duty on petrol: NITI Aayog
States can and must cut the duty on petrol, while the Center should create fiscal space to deal with the spurt in oil prices, NITI Aayog Vice-Chairman Rajiv Kumar said today. The rising crude prices in the international market prompted state-owned oil companies to raise domestic prices for the 11th day in a row. Petrol costs Rs. 77.47/litre in Delhi and diesel, Rs. 68.53/litre.
Important for states to cut 10-15% duty
"There is merit in reducing duties both by the states and the Centre. More for the states as they tax the oil on ad valorem basis," Kumar said. He added that it is important for the states to agree 10-15% duty cut and take home the same amount of tax revenue as budgeted. The states, he said, on an average tax petrol at 27%.
Electricity should be bought under GST: Kumar
Kumar said the Center could consider reducing the additional excise duty on petrol and should not temper with infrastructure cess which is being directly used for developmental activities. He opined that electricity should also be brought under the GST. Petrol and diesel prices were raised for the 11th day in succession today after a 19-day freeze was imposed just before the Karnataka elections.
Past instances of excise duty hikes
The government raised excise duty nine times between November 2014 and January 2016 to shore up finances as global oil prices fell, but then cut the tax just once in October last year by Rs. 2 a liter.
