Business | Economy
Chidambaram seeks to abolish 6% excise duty on petrol and diesel sales
India proposed changing its excise duty structure for sales of petrol and diesel in a budget that failed to cheer the oil sector, which had hoped for wider tax changes and steps to encourage investment.
- Reuters
- Published: 01:04 March 1, 2008
New Delhi: India proposed changing its excise duty structure for sales of petrol and diesel in a budget that failed to cheer the oil sector, which had hoped for wider tax changes and steps to encourage investment.
Finance Minister Palan-iappan Chidambaram said he wanted to abolish a six per cent excise duty on sales of petrol and diesel while raising the flat rate component by Rs1.35 (three cents) a litre.
B. Mukherjee, director of finance at Hindustan Petroleum Corp, said the move would be budget neutral and was aimed at streamlining duty payment procedures.
Chidambaram, presenting the fifth and last full budget of the left-leaning ruling administration, said the change would not impact pump prices.
"I propose to abolish ad valorem part of excise duty on unbranded petrol and unbranded diesel. And replace the same by equivalent specific duty of Rs1.35 per litre," Chidambaram told Parliament.
He said after the implementation of the new duty structure total excise duty on petrol would stand at Rs14.35 per litre, while unbranded diesel would attract duty of Rs4.65 a litre.
Shares in many oil companies dropped between three to five per cent after the budget failed to meet the oil industry demands, which had expected a reduction in state levies and steps to encourage more investment in the oil and gas sector.
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