New Delhi: The government has changed the excise duty structure on branded or premium diesel, shifting from fixed rates to a combination of ad valorem and fixed duty.
Branded diesel will now be charged at 14 percent of refinery gate price of the fuel plus Rs 5 per litre or Rs 10.25, whichever is lower, according to notification issued by Department of Revenue in the Finance Ministry.
The duty shift will not result in any change in retail price as the notification stated that the fuel will be charged with a duty of "14 percent plus Rs 5 per litre or Rs 10.25 per litre, whichever is lower".
The fuel, which is sold under brands 'XtraMile' by Indian Oil Corp (IOC), 'Hi speed Diesel' by Bharat Petroleum Corp Ltd (BPCL) and 'Diesel Super' and 'Turbo Jet' by Hindustan Petroleum Corp Ltd (HPCL), till now attracted a total excise duty of Rs 10.25 per litre.
The specific excise duty rates for unbranded or normal diesel as well as unbranded and branded petrol have not been changed and they will continue to be charged at specific rates.
Originally, excise duty on petrol and diesel was ad valorem. This was changed into specific rates as with every increase or diesel in prices, the incidence of duty also increased or decreased, thereby impacting the pump rates.
With global oil prices slumping to near six year low of about USD 44 per barrel, the government has raised excise duty on both petrol and diesel on four occasions since November to mop up an additional Rs 18,000-20,000 crore this fiscal without impacting the consumer.
Currently, unbranded or normal petrol is charged with a total of Rs 16.95 per litre. This is made up of basic cenvat duty of Rs 8.95 a litre plus Rs 6 special additional excise duty and Rs 2 per litre additional excise duty which goes towards building highways.
Branded petrol, which is sold under brands at 'Premium' by IOC, 'Power' by HPCL and 'Speed' by BPCL, is charged with a total excise duty of Rs 18.10 per litre (Rs 10.10 plus Rs 6 plus Rs 2).
Similarly, unbranded diesel today commands an excise duty of Rs 9.96 per litre (Rs 7.76 basic excise and Rs 2 additional excise that goes towards building highways).
The same on branded diesel is made up of Rs 10.25 a litre plus Rs 2 additional excise rate.