Recommendation of the Policy Planning Cell of the Ministry of Petroleum and Natural Gas, Government of India
December 26, 2006 (Press Release) --
Views/suggestions concerning the overall tax structure regarding both direct taxes and indirect taxes/duty rates for specifications - Proposal for Budget 2007-08
This has reference to our letter of even reference dated 13/11/06 and the telephonic discussions the undersigned on the subject.
As desired, we enclose the revised calculations with the assumption that the excise duty on petrol/diesel shall also be increased to an extent so that gain on account of reduction in customs duty is neutralized.
The details of the proposed tariff structure (under 2 options) are as follows:
Customs Duty
Product Present Proposed
Option I Option II
Crude 5% 0% 2.5%
Petrol 7.5% 2.5% 5%
Diesel 7.5% 2.5% 5%
SKO Nil Nil Nil
LPG Nil Nil Nil
ATF 10% 5% 7.5%
Naphtha 5% 0% 2.5%
FO/LSHS/Bitumen/Wax 10% 5% 7.5%
Excise Duty
Product Present Proposed
Option I Option II
Naphtha 16.32% 22.08% 19.13%
FO/LSHS 16.32% 21.69% 18.91%
Bitumen 16.32% 21.52% 18.83%
LOBS 16.32% 21.54% 18.87%
LDO 16.32% + Rs.2.55/Ltr. 16.32% + Rs.3.50/Ltr. 16.32% + Rs.2.98/Ltr.
ATF (Domestic) 8.16% Rs.6.08/Ltr. Rs.5.56/Ltr.
Petrol 8.16% + Rs.13.26/Ltr. Rs. 15. 92/Ltr. Rs.15.44/Ltr.
Diesel. 8.16% + Rs.3.32/Ltr. Rs.6.08/Ltr Rs.5.56/Ltr.
The above tariff structure would ensure price neutrality and the revenue implications of the above proposals would be as follows:
Rs./Crores
Revenue Loss Option I Option II
Reduction in customs duty on crude and petroleum products by 5%/25% 9041 4522
Sub-Total 9041 4522
Revenue Gain
Increase in excise duty. on A TF 1015 858
Increase in excise duty rate of Petrol, Diesel Bitumen, Lobs, Naphtha, FO and LSHS 9857 4922
Total Gain 10872 5780
Net Gain 1831 1258
This has reference to our letter of even reference dated 13/11/06 and the telephonic discussions the undersigned on the subject.
As desired, we enclose the revised calculations with the assumption that the excise duty on petrol/diesel shall also be increased to an extent so that gain on account of reduction in customs duty is neutralized.
The details of the proposed tariff structure (under 2 options) are as follows:
Customs Duty
Product Present Proposed
Option I Option II
Crude 5% 0% 2.5%
Petrol 7.5% 2.5% 5%
Diesel 7.5% 2.5% 5%
SKO Nil Nil Nil
LPG Nil Nil Nil
ATF 10% 5% 7.5%
Naphtha 5% 0% 2.5%
FO/LSHS/Bitumen/Wax 10% 5% 7.5%
Excise Duty
Product Present Proposed
Option I Option II
Naphtha 16.32% 22.08% 19.13%
FO/LSHS 16.32% 21.69% 18.91%
Bitumen 16.32% 21.52% 18.83%
LOBS 16.32% 21.54% 18.87%
LDO 16.32% + Rs.2.55/Ltr. 16.32% + Rs.3.50/Ltr. 16.32% + Rs.2.98/Ltr.
ATF (Domestic) 8.16% Rs.6.08/Ltr. Rs.5.56/Ltr.
Petrol 8.16% + Rs.13.26/Ltr. Rs. 15. 92/Ltr. Rs.15.44/Ltr.
Diesel. 8.16% + Rs.3.32/Ltr. Rs.6.08/Ltr Rs.5.56/Ltr.
The above tariff structure would ensure price neutrality and the revenue implications of the above proposals would be as follows:
Rs./Crores
Revenue Loss Option I Option II
Reduction in customs duty on crude and petroleum products by 5%/25% 9041 4522
Sub-Total 9041 4522
Revenue Gain
Increase in excise duty. on A TF 1015 858
Increase in excise duty rate of Petrol, Diesel Bitumen, Lobs, Naphtha, FO and LSHS 9857 4922
Total Gain 10872 5780
Net Gain 1831 1258
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