New Delhi: The Central government’s revenue collection from the petroleum sector recorded a sharp jump of over 45% in the last financial year as the retail prices of petrol reached a high of Rs 90 a litre and Rs 81 a litre for diesel in the national capital Delhi at the end of March. On July 16, the petrol price was Rs 101.54 per litre in the national capital Delhi and Rs 107.54 per litre in the country’s financial capital Mumbai. The price of diesel in Delhi was Rs 89.87 per litre and Rs 97.45 per litre in Mumbai.
The Centre's revenue collection from the petroleum sector, which includes excise duty, customs duty, CGST and IGST, and royalty payments among others, increased from Rs 2,87,540 crores in FY 2019-20 to Rs 4,18,637 crore, an increase of Rs 1,31,097 crore or 45.59%. If one looks at the total earnings of the Centre, which also includes corporate tax, dividend income, dividend distribution tax and earnings from exploration of oil and gas then this amount was Rs 4,53,812 crore last year. It increased from Rs 3.34 lakh crore in 2019-20 to nearly Rs 4.54 lakh crore, an increase of more than Rs 1.19 lakh crore or nearly 36%.
If one looks at the composition of the Centre's revenue collection and other incomes then the Excise duty, which the Centre levies on the production of petrol and diesel, alone accounts for nearly 90% of the total tax collection and almost 82% of the total revenue and earnings from the sector. Last year, the Centre raised excise duty on petrol by Rs 13 per litre and on diesel by Rs 16 a litre in two tranches. It took the total incidence of excise duty on petrol to Rs 30.40 per litre and with agriculture and infra development cess of Rs 2.50 a litre, Centre's tax on per litre of petrol comes at Rs 32.90 per litre.
Excise duty on Diesel is Rs 27.80 per litre, and agriculture and infra development cess is Rs 4 per litre, making it 31.80 per litre for diesel. In 2014, when the Modi government assumed office, the excise duty on petrol was Rs 9.48 per litre and on diesel, it was Rs 3.56 a litre. As a result, Excise duty collection went up from Rs 2.23 lakh crore in 2019-20 to more than Rs 3.71 lakh crore in 2020-21, an increase of more than 66% in just one year.
Centre's revenue jumped by 230%, excise by 275%
Centre's total revenue collection from the petroleum sector, which was Rs 1,26,025 lakh crore in 2014-15 when the NDA government came to the power in the Centre, went up to Rs 4,18,637 crore in FY 2020-21, an increase of more than 2.92 lakh crore or more than 230% in the six-year period. If one looks at the increase in the excise collection then during the same period, excise collection went up from Rs 99,068 crore to Rs 3,71,726 crore, an increase of Rs 2,72,658 or more than 275%.
The total collection of the Centre - revenue, dividend, taxes and other earnings - went up from Rs 1,72,065 crore in FY 2014-15 to Rs 4,53,812 crore an increase of more than Rs 2.81 lakh crore or more than 163%. However, during the same period, the Centre's dividend and income tax earnings declined from Rs 46,000 crore to a little over Rs 35,000 crore.
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States petroleum revenue declined last year
Strangely enough, while there was a sharp jump of 45% in the Centre's revenue collection from the petroleum sector last year, in the case of States, it declined from Rs 2,20,841 crore to Rs 2,17,271 crore, a decline of Rs 3,570 crore. Sales Tax or VAT on the sale of petroleum products accounts for the biggest chunk of States' revenue from the petroleum sector. In FY 2020-21, States earned Rs 202,937 crore in VAT while for FY 2019-20, the figure of VAT collection stands at Rs 2,00,493 crore. States also earn a royalty on crude oil and natural gas that was Rs 7,179 crore last year.
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