Centre amends law to enable excise duty increase on fuel

Changes made to Finance Bill to raise the levy on petrol, diesel by ₹8 per litre

Updated - March 23, 2020 11:34 pm IST

Published - March 23, 2020 11:33 pm IST

On upswing: The government had on March 14 raised excise duty on petrol and diesel by ₹3 per litre.

On upswing: The government had on March 14 raised excise duty on petrol and diesel by ₹3 per litre.

The government on Monday amended the law to get enabling powers to raise excise duty on petrol and diesel by ₹8 per litre each in future.

Finance Minister Nirmala Sitharaman moved an amendment to the Finance Bill, 2020, to raise the limit up to which the government can raise special excise duty on petrol and diesel to ₹18 per litre and ₹12, respectively.

The amendment, along with the Finance Bill, was passed without a debate in the Lok Sabha.

The government had on March 14 raised excise duty on petrol and diesel by ₹3 per litre each to raise an additional ₹39,000 crore in revenue annually. This duty hike included ₹2 a litre increase in special additional excise duty and ₹1 in road and infrastructure cess.

This hike took the special additional excise duty to maximum permissible in law — ₹10 in case of petrol and ₹4 in case of diesel.

Now, through an amendment of the Eighth Schedule of the Finance Act, this limit has been increased to ₹18 per litre in case of petrol and ₹12 in case of diesel.

No hike planned for now

This is an enabling provision and no change in excise duty is being done as of now, an official said.

The amendment gives powers to the government to raise the duty by up to ₹8 per litre in petrol and diesel at any time it wishes.

Earlier in the day, the Lok Sabha passed the Finance Bill, 2020, without any discussion as the House curtailed its sittings in the wake of the COVID-19 outbreak.

More than 40 amendments were introduced by the government to the Finance Bill, which was moved for consideration and passing, by the Finance Minister.

The decision to pass the Bill without any discussion was taken at an all-party meeting convened by Speaker Om Birla. Some amendments moved by the Opposition were negated. The Bill gives effect to the financial proposals of the Central Government for fiscal 2020-21.

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