India: Government not in favor of reducing excise duty on petrol and diesel
The finance ministry is not in favor of cutting excise duty on petrol and diesel to provide relief to the common man from spike in their prices but wants states to cut sales tax or Value Added Tax (VAT) on fuel.
The finance ministry official said however that a reduction in excise duty, which makes up for a quarter of retail fuel price, is not advisable if the government is to stick to the path of reducing budgetary deficit. “Excise duty cut would be a political call, but is not advisable if we have to stick to the fiscal deficit glide path outlined in Budget,” he said.
A committee will be thus set up by next week to make a final decision.