Summary:
New Delhi, May 22 (PTI) Finance Minister Nirmala Sitharaman on Sunday rebutted the Opposition"s criticism of excise duty cut impacting share of states in central taxes, saying the Rs 8 a litre cut in petrol and Rs 6 reduction in diesel have been done in road and infrastructure cess levied on the two fuels, collection on which was never shared with states.
First, former union finance minister P Chidambaram and then other Opposition leaders stated that the reduction in excise duty announced on Saturday evening would reduce the share of states in central taxes.
Chidambaram on Sunday retracted his statement saying the cut in the levies accrues to the central government alone.
Taking to Twitter, Sitharaman said she is sharing some useful facts on levies on petrol and diesel for the benefit of all.
"Basic Excise Duty (BED), Special Additional Excise duty (SAED),Road & Infrastructure Cess (RIC) and Agriculture & Infrastructure Development Cess (AIDC) together constitute Excise Duty on petrol and diesel.
Basic ED is sharable with states.
SAED,RIC & AIDC are non-sharable," she said.
The excise duty reduction of Rs 8 per litre on petrol and Rs 6 a litre on diesel has entirely been made in RIC.
This was the case even in November 2021 when tax on petrol was cut by Rs 5 and that on diesel by Rs 10, she said.
As per the centre-state tax sharing formula, 41 per cent of taxes collected by the Centre go to states.
These however do not include collections from levy of cess.
Most of the tax on petrol and diesel is made up of cess.
While total incidence of central tax on petrol prior to Saturday"s cut was Rs 27.90 per litre, basic excise duty was only Rs 1.40 a litre.