Petrol, diesel shore up govt’s revenues to ₹3.89-lakh crore
The Centre has collected over ₹3.89-lakh crore through central excise duty during FY21; this is the highest since Narendra Modi came to power in May 2014.
Total collection jumps
Data from Controller General of Accounts (CGA) show that the total collection during FY21 by way of net central excise duty jumped by 62.73 per cent year-on-year. Before that, the highest collection was ₹3.80-lakh crore during FY17, which was a normal year.
Surge in collection during FY21 is significant, given the lockdowns. Also, the fiscal recorded the worst-ever contraction of 7.3 per cent with the the previous one at 5.2 per cent in FY80. Though the farm agriculture sector has done well, industry and services — with over 80 per cent share in GDP — ended in the red. However, some improvement was seen in manufacturing sector during the last three months of previous fiscal.
Amid all these, one key reason for the record collection could be revision in central excise duty petrol and diesel last May; central excise duty on petrol was hiked by ₹10, while that on diesel was ₹13. This revision was estimated to bring in additional revenue of around ₹1.60-lakh crore for the fiscal year as whole. Interestingly, increase in collection during FY21 was over ₹1.50-lakh crore.
Data from CGA also show this year’s April collection at ₹154 crore against ₹80 crore during the corresponding month last fiscal. This increase is also significant as the Centre levies excise duty at a specific rate.
There are four components of central excise duty on petrol and diesel – basic excise duty (₹1.40 and ₹1.80 a litre), special additional excise duty (₹11 and ₹8 a litre), road and infrastructure cess (₹18 a litre on both) and agriculture infrastructure and development cess (₹2.5 and ₹4 a litre). Besides, since it is specific and not ad valorem, global fall in prices of crude oil, petrol and diesel prices will not hit the collection numbers.