Crude oil prices in the international market have come substantially down, but surprisingly the prices of petroleum products in India are on the rise, pinching the common man's pocket. But then where is the huge money, being earned through several hikes in indirect taxes, going?
Well, according to the government's response to an RTI application, even as the money in the common man's pockets seems to have developed wings, it is the government coffers that are benefiting from the high prices of petroleum products.
During the financial year 2016-2017, the government earned a whopping Rs 2.67 lakh crore revenue on account of several increases in indirect taxes (Excise, Customs and import duties) on such products.
In response to an RTI application, filed by social worker Chandrashekhar Gaur of Neemuch district in Madhya Pradesh, the Directorate General of System and Data Maintenance (DGSDM) provided some data to suggest that in sharp contrast to the earnings of Rs 2.67 lakh crore in FY17, the revenue was only Rs 98,602 crore in FY13.
As Gaur had asked for the revenue accruing each year from 2012-13 until 2016-17, the information from DGSDM said that in 2013-14, the earnings from indirect taxes on the petroleum products stood at Rs 104,163 crore, which rose to 122,926 in FY15 and went up to Rs 203,825 lakh crore in 2015-16.
In other words, government earnings from petroleum products increased three times over a period of five years, primarily on account of increase in indirect taxes from time to time.
According to the data, while the revenue earned in 2012-13 from the sale of petrol was Rs 23,710 crore and from diesel Rs 22,513 crore, in 2016-17, petrol and diesel fetched Rs 66,318 crore and Rs 124,266 crore revenue, respectively.
Going by the figures, earlier petrol was a higher revenue earner compared to diesel. But now, diesel is earning the government revenue greater than petrol, as there is a six-fold increase in the revenue diesel is earning now than it would in 2012-13.
This also reflects on the reason for price rise of essential commodities: since agriculture, industry and transportation of goods all use diesel more than petrol -- if the diesel price goes up, so will the prices of commodities.
Gaur says that petroleum products should also be brought within the ambit of Goods and Services Tax, or GST, which is only logical and would be beneficial for the consumers.
Besides, he also proposes a mechanism wherein if the prices of crude petroleum rises beyond a certain limit, the effective tax rates start coming down.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)