Government to impose additional excise duty on diesel cars

As per recent reports, Indian Finance Ministry is currently discussing on the measures to collect duty so as to assist loss-making oil marketing companies. It is expected that once the debate is over, buyers will have to pay more for buying diesel cars since the finance ministry is planning to raise the excise duty on diesel cars in India.

Finance ministry officials said that idea of increasing the excise duty on diesel cars had been earlier also, but now the requirement of concrete measures is necessary. This is due to the huge difference between the petrol and diesel prices. They further commented that there were various other issues as well in the option on which debate was going on.

As per resources, Finance Ministry is discussing on how the collection of duty will assist loss-making oil marketing companies and how more resources can be directed to these companies so as to avoid addition of rising crude prices in diesel car maker’s profit figures.

Furthermore, Finance Ministry needs to regulate on what amount and what form, tax will be taken from diesel cars. One option is to augment excise duties on the basis of emergency powers mentioned in Central Excise Tariff Act. Finance Ministry Officials also commented that government will have to create new duty slab on diesel cars or add more money on the duty.

If reports are believed, Planning Commission member, Kirit Parikh said that imposing more tax on diesel cars will reimburse the huge gap in the prices of both the fuels. Earlier also, Delhi government presses an additional duty of 25 percent on diesel vehicles.

It is worth mentioning that currently there is no difference in the duty structure of petrol and diesel cars across the globe and India also has not yet pressed any change in it. However, right now Indian government charges custom duty of 10 percent on small cars and 22 percent (plus Rs 15,000) on big cars.