Fuel Price Excise Duty Cut Burden Entirely On Central Government, Says Finance Minister

Finance Minister Nirmala Sitharaman on Sunday said that excise duty reduction has entirely been made in road and infrastructure cess

Fuel Price Excise Duty Cut Burden Entirely On Central Government, Says Finance Minister

Finance Minister Nirmala Sitharaman has said excise duty cut on fuel prices is borne by Centre

A day after Government announced excise duty cut in petrol and diesel prices, Finance Minister Nirmala Sitharaman on Sunday said that the reduction has entirely been made in road and infrastructure cess (RIC), which is not shared with states.

In other words, the Finance Minister made it clear that the excise duty cut burden has been borne entirely by the Centre.

She said that even in November 2021, the excise duty reduction of Rs 5 per litre in petrol and Rs 10 per litre in diesel was entirely made in RIC.

"Basic excise duty (BED), special additional excise duty (SAED), RIC and agriculture & infrastructure development cess (AIDC) together constitute excise duty on petrol and diesel," she said in a tweet.  

"Basic excise duty is sharable with states while SAED, RIC and AIDC are non-sharable," the Finance Minister tweeted.

Ms Sitharaman's tweets came as a rebuttal to the Opposition's criticism of the Government's move.

Earlier, former union finance minister P Chidambaram and then other Opposition leaders had stated that the reduction in excise duty announced on Saturday evening would reduce the share of states in central taxes.

Later Mr Chidambaram on Sunday retracted his statement saying the cut in the levies accrues to the central government alone.

Meanwhile the Finance Minister further said that the NDA Government had spend much more than the earlier Congress-led UPA regime on development works.

"Reserve Bank of India (RBI) data shows total developmental expenditure incurred by the PM Narendra Modi-led Government during 2014-22 was Rs 90.9 lakh crore. In contrast, only Rs 49.2 lakh crore was spent on developmental expenditure during 2004-2014," Ms Sitharaman said in another tweet.

She further said that "expenditure incurred by our Government under Mr Narendra Modi includes Rs 24.85 lakh crore spent so far on food, fuel and fertiliser subsidies and Rs 26.3 lakh crore on capital creation. Over the 10 years of UPA, only Rs 13.9 lakh crore was spent on subsidies".

Government on May 21 had reduced excise duty on petrol by Rs 8 per litre and by Rs 6 per litre on diesel in a move to combat rising inflation.

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