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Government is considering plan to abolish 5 per custom duty  

Centre planning to abolish 5 per cent Customs duty on crude oil

Friday, March 11, 2011

The Indian Central government is considering a plan to abolish the 5 per custom duty, which is levied on crude oil, if the prices of the commodity keep on rising towards the recent high of June 2008 levels. All the public sector oil companies were hopeful that in union budget of FY 2012 the government will remove the custom duty on oil just like they did in FY 2009 keeping in the mind the increasing prices of oil in the global markets. However, the government said that if the prices of crude oil will keep on increasing, they will take appropriate action. The rising prices of oil products is putting immense pressure on the profitability of domestic oil companies as apart from petrol, the prices of other products like diesel and gas are still controlled by the government. However, implementing this decision would be difficult for the government as duty on crude oil contributes approximately 20 per cent of the revenues generated in custom revenues.

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