It is no secret that higher excise duty on fuel has helped the Centre improve its finances. But according to the latest report of the Comptroller and Auditor General of India, revenue from petroleum products has risen by 125 per cent between 2013-14 and 2015-16.
Revenue from central excise duty on petroleum products jumped up to ₹1,98,793 crore in 2015-16 from ₹1,06,653 crore in 2015-16. The revenue from fuel in 2013-14 was ₹88,065 crore.
“It is observed that during 2015-16, there is a huge increase in central excise collection from petroleum sector as specific central excise duty on petrol and high speed diesel increased from ₹1.2 litre and ₹1.46 per litre to ₹8.95 per litre and ₹7.96 per litre during the last two years,” said the report on Indirect Taxes (Central Excise), which was tabled in Parliament on Friday.
Taking advantage of the low global crude oil prices that fell to below $40 per barrel, the Finance Ministry has over the last two years hiked the central excise duty on petrol and diesel to help push up capital spending and control the fiscal deficit.
With oil prices now on the rise again, officials have indicated that they will remain comfortable until it increases to $65 per barrel.
The CAG report also notes that petroleum products provide the largest share of revenue and contribute 69.23 per cent of the central excise kitty in 2015-16. Duty on tobacco products, that raised ₹21,463 crore last fiscal, contributes 7.47 per cent of the receipts, followed by iron and steel (5.79 per cent), motor vehicles (4.95 per cent) and cement 3.67 per cent.
Income taxMeanwhile, even as the government is hoping that demonetisation will improve tax compliance, a separate report of the CAG on Direct Taxes notes that data on tax deducted at source suggests improvement in compliance of TDS and tax collection at source.
Revenue from TDS increased by 44.7 per cent to ₹2.87 lakh crore in 2015-16 from ₹1.98 lakh crore in 2011-12.