The Congress party has opposed the increase in cess and excise duty by Re 1 each, saying at a time when fuel prices are falling across the world, the Centre has decided to increase the levy on fuel. Accusing the government of ignoring common man, the party said the government had decided to impose higher levies.
Reacting on the Budget announcements, AICC General Secretary Jyotiraditya Scindia said: "While fuel prices are decreasing across the world, the government, rather than providing relief to consumers, has decided to implement additional cess and excise duty."
जब विश्व भर में पेट्रोल और डीज़ल के दाम गिर रहे हैं, तो उसका फ़ायदा आम आदमी तक पहुंचाने के बजाय सरकार 1 रुपये प्रति लीटर की उत्पाद शुल्क (excise duty) और उपकार (cess) लगाने जा रही है | यह निंदनीय कदम एक आम और गरीब इंसान के पेट पर लात मारने के बराबर है | #Budget2019- Jyotiraditya Scindia (@JM_Scindia) July 5, 2019
With an increase in the excise duty and cess, fuel prices across the country will rise by a significant margin. Petroleum products, being cash cows for the exchequer, fetch huge revenue, and an increase in excise duty will hurt consumers. Petrol was priced at Rs 70.51 in Delhi and Rs 76.15 per litre in Mumbai on July 4, while diesel was priced at Rs 64.33 per litre in Delhi and Rs 67.96 per litre in Mumbai.
"Crude prices have softened from their highs. This gives me a room to review excise duty and cess on petrol and diesel. I propose to increase Special Additional Excise duty and Road and Infrastructure Cess each by one rupee a litre on petrol and diesel," Sitharaman said in her Budget speech.
Right now, petrol attracts excise duty of Rs 17.98 per litre, while VAT levied on petrol amounts to Rs 14.98. The overall price charged from dealers amounts to Rs 32.96 per litre. In the case of diesel, the government charges Rs 13.83 per litre excise duty and Rs 9.47 per litre VAT. The price charged to dealers amounts to Rs 23.3 per litre.
It has been a common practice in the past to cut duties when global crude prices increased. However, since 2014, the government has been found increasing excise duty even as global prices fell, leading to an increase in the central government's revenue.