As a result of an increase in excise taxes on petroleum products, the government has collected 48 percent more in the first four months of the current fiscal year than it did in the entire fiscal year before.
Excise duty collections increased to over 1 lakh crores during April-July 2021, according to data from the Union Ministry of Finance's Controller General of Accounts, up from Rs. 67,895 crores in the same period the previous fiscal.
Only petrol, diesel, ATF, and natural gas are subject to excise duty under the Goods and Services Tax (GST) regime. With the exception of these goods and services, all other goods and services are subject to the GST.
The incremental collections of 32,492 crore in the first four months of the fiscal year 2021-22 (April 2021 to March 2022) are three times the government's total liability of 10,000 crore for repayment of oil bonds issued by the previous Congress-led UPA government to subsidise fuel.
Industry sources estimate that this year's incremental excise duty collections may be over 1 lakh crore compared to last, due to an increase in sales and a recovering economy.
An amount of 1.34 lakh crore was allotted to state-owned oil companies as compensation for selling fuels, such as cooking gas (LPG), kerosene, and diesel, below cost. Of this, ₹10,000 crores is due in the current fiscal year, as per the Finance Ministry.
India's top ministers have blamed oil bonds for limiting fiscal space to give relief to people from fuel prices trading at a near-record high. First Finance Minister Nirmala Sitharaman and then Oil Minister Hardeep Singh Puri had ruled out a cut in excise duty on petrol and diesel.
The finance minister had ruled out a cut in excise duty on petrol and diesel, saying payments in lieu of past subsidies pose limitations.