NEW DELHI: The Centre’s tax collection from the oil sector swelled 36 per cent in 2020-21 to more than Rs 4.5 lakh crore from Rs 3.3 lakh crore in 2019-20, buoyed by last financial year’s tax hikes on petrol and diesel, government data presented in Parliament on Monday show.
Taxes on petrol and diesel, including excise duty and various cess, contributed Rs 3.7 lakh crore in 2020-21, up 68 per cent from Rs 2.2 lakh crore in 2019- 20, junior finance minister Pankaj Choudhary told Lok Sabha in a written reply. Separately, junior petroleum minister Rameshwar Teli told the Rajya Sabha in a written reply that states collected Rs 2,02,937 crore as sales tax/ VAT on petrol and diesel in 2020-21, just 1 per cent higher than Rs 2,00,493 crore.
The data makes it clear that the Centre was wrong in blaming state taxes for the record fuel prices, which actually shot through the roof because the sharp excise duty hike in the March-May period of 2020 amplified the impact of rising oil prices. The Centre had raised excise duty by Rs 13 per litre on petrol and Rs 16 on diesel when oil prices crashed due to the Covid pandemic.
