Petrol & diesel duty rollback updates
Govt says no to petrol, diesel duty rollback
The finance ministry has ruled out any rollback of excise duty hike on petroleum products, despite mounting pressure from the opposition parties and UPA allies to do so. Ruling out the rollback, revenue secretary Sunil Mitra told a gathering of industrialists at a post budget seminar at Assocham that fiscal consolidation and growth would continue to be the priorities of the government.
The union budget for 2010-11 had hiked customs duty on petrol and diesel to 7.5 per cent from 2.5 per cent while excise duty was raised by one rupee on non-branded (normal) petrol and diesel. This has led to widespread protest across the political spectrum with a strong demand for the duty rollback. Mitra said fiscal consolidation would only be achieved "with no tinkering in excise and customs duties proposal announced for petroleum sector in this year's budget." He dispelled fears in this regard while arguing that the hike in excise and customs duties would not fuel inflation in the long run.
Food inflation is mainly due to supply side constraints. There will only be a marginal impact on prices due to duty hike, Mitra argued.
On the minimum alternate tax (MAT) issue, the revenue secretary pointed out that the government not only relaxed surcharge on corporate tax but also substantially raised income tax rebate for common man, the impact of which would be that consumers would have greater purchasing power, and would be able to save. Therefore, the three per cent hike in MAT should be taken by the industry in right spirits as it would marginally increase their tax burden, Mitra asserted. By Shruti Verma, Financial Chronicle, New Delhi, 4 March 2010
