PHD Chamber seeks 25 pc cut in excise duty, VAT on petroleum products

New Delhi, Mar 11 () Industry chamber PHD Chamber has urged the government to reduce excise duty and VAT (value added tax) on petrol and diesel by 25 per cent to bring down the prices by Rs 9 to 10 per litre.

"Prices of the petroleum products should be in sync with the deceleration in the international crude oil prices and all the movement in the International crude oil prices must be captured and implemented in the domestic prices in the same way," PHD Chamber of Commerce and Industry President D K Aggarwal said in a statement.

He further said this can be a boon for the Indian economy as inflationary conditions will be benign and price cost margin of the businesses will improve.

International crude oil prices have declined significantly from USD 63.27 per barrel as on January 6, 2020 to USD 31.13 as on March 9, 2020, while petrol prices in India (Delhi) decreased from Rs 75.69 to Rs 70.59 during the same period.

He said the significant 50 per cent fall in international crude oil prices has only resulted in 7 per cent decline in the domestic petrol prices.

The build-up of petroleum product prices because of various taxes, duties and commissions (fixed excise duties at Rs 19.98/litre and VAT at Rs 15.25/litre in Delhi) is so high that any significant crude oil price decline is also not reflected in the prices of petroleum products in India, Aggarwal said.

At this juncture, we suggest to reduce excise duties and VAT on petroleum, diesel and allied products by at least 25 per cent to bring down the prices of petroleum products, which will be a big relief to the industry, boost and kick start economic growth while reviving the spirit in the economy, he said. KKS ABM