The Indian government on Monday has amended the law to possess the power to raise excise duty on petrol and diesel by Rs.8 per liter each in the future.
Nirmala Sitharaman, the finance minister of India moved an amendment to the Finance Bill, 2020, to raise the limit up to which the government can hike special excise duty on petrol and diesel to Rs.18 per liter and Rs.12.
The excise duty on petrol and diesel was raised by the Indian government on March 14 by Rs.3 per liter each to raise an additional Rs.39,000 crore in revenue annually.
This duty hike included Rs.2 a liter increase in special additional excise duty and Rs.1 in Road and infrastructure cess.
This hike of the special additional excise duty to maximum permissible in law is at Rs.10 in case of petrol and Rs.4 in case of diesel.
Now, after the amendment of the Eighth Schedule of the finance act, this limit has been increased to Rs.18 per liter concerning petrol and Rs.10 concerning diesel.
The said amendment was passed in the Lok Sabha along with the finance Bill without a debate.
This is an enabling provision and as of now, no change in excise duty is being done, said an official.
However, the amendment enables the Indian government to raise the duty by up to Rs.8 per liter in petrol and diesel at any time it wishes.