Government may get room to cut cess on fuel: ICRA

CHENNAI: While the government’s tight fiscal position and high dependence of fuel taxes have resulted in the continued levy of substantial taxes imposed during the onset of the pandemic last year, ratings agency ICRA said that if fuel consumption growth comes in as expected this fiscal, the government could get room to slash fuel cesses by Rs 4.5 per litre.

The agency noted that the estimated growth in consumption would result in Rs 40,000 crore of extra cess collections during the current fiscal (FY22) compared to the previous one—additional that the government could choose to forego by making cess reductions.