Govt earned over ₹3.71 lakh cr in FY21 from VAT on petrol, diesel: Sitharaman

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The central government earned more than 3.71 lakh crore in fiscal 2020-21 alone from taxes on petrol and diesel, Union finance minister Nirmala Sitharaman told Parliament on Tuesday. This would reach a total of 8.02 crore lakh crore if the amount earned in the last three fiscals from taxes is calculated.

The excise duty or value added tax (VAT) on petrol was hiked from 19.48 per litre as on October 5, 2018, to 27.90 as on November 4, 2021. During the same period, the VAT on diesel rose from 15.33 per litre to 21.80, the finance minister said in a written reply to the Rajya Sabha.

“The central excise duties, including cesses collected from petrol and diesel, during the last three years are – 2,10,282 crore in 2018-19; 2,19,750 crore in 2019-20 and 3,71,908 crore in 2020-21,” Sitharaman informed Parliament.

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Between October 2018 and July 2019, the excise duty on both fuels, however, witnessed a dip. The VAT on petrol dropped from 19.48 per litre as of October 5, 2018, to 17.98 as of July 6, 2019. The excise duty on the equal quantity of diesel decreased from 15.33 to 13.83 during the same period.

Since February 2, 2021, VAT on both fuels have been seeing an upward swing before the Centre on November 3 — a day before this year’s Diwali — announced a slash in the amount. Excise duty on petrol was reduced by 5 a litre, while it was cut by 10 a litre on diesel.

Several states, with a majority being the Bharatiya Janata Party (BJP)-ruled ones such as Karnataka, Bihar, Uttar Pradesh, Tripura and Gujarat, among others, announced cuts in excise duty on petrol and diesel on November 3 itself. Towards the end of the previous month, non-BJP states, including Rajasthan and Chhattisgarh, also slashed VAT on petrol and diesel prices.

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