New Delhi: The government will incur a revenue loss of Rs 7,000 crore in a fortnight following the Rs 10 per litre cut in excise duty on petrol and diesel, while gains from export duties on diesel and aviation turbine fuel (ATF) are estimated at about Rs 1,500 crore, said Vivek Chaturvedi, Chairman of the Central Board of Indirect Taxes & Customs (CBIC).
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The estimates follow the government’s decision on Friday to reduce central excise duty on petrol and diesel for domestic consumption by Rs 10/litre, while imposing export duties of Rs 21.5 per litre on diesel and Rs 29.5 per litre on ATF to ensure domestic availability.
Chaturvedi said rising global crude prices amid the ongoing conflict had pushed up diesel and ATF prices, creating incentives for refiners to export these fuels at higher international rates. “Because of the conflict, the prices of crude oil has gone up. Alongwith it, there has also been a surge in the prices of diesel and ATF. So, this has created an international market and this has created incentives for refineries to export these fuels at higher international prices. So, the government’s response to this has been a very calibrated response. Yesterday, we came up with certain export duties in the form of Special Additional Excise Duty (SAED) and road and infrastructure cess. Both these duty and cess have been imposed on the export of diesel and ATF,” he said.
The CBIC Chairman said that the duty structure will be reviewed on a fortnightly basis. “The idea behind making these changes is to prioritise the availability of these products and to ensure energy security for the country in the midst of global uncertainty which has been exacerbated by disruptions in the supply chain and the uncertainty prevailing in the international markets, both in terms of availability and price,” he added.
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Chaturvedi said preliminary estimates suggest a revenue loss of about Rs 7,000 crore and gains of around Rs 1,500 crore over a two-week period, though the situation remains fluid. “Please understand that the situation is dynamic. It is not business as usual where you would have a certain predictability. You are all aware about the passages of ships and the associated problems. So, any calculation of revenue implication will have to factor in the actually supply of goods coming into the country,” he said.