New Delhi: Finance Minister Nirmala Sitharaman could announce several measures to deal with the economic impact of Covid-19 in her reply to the Finance Bill on Monday.
According to a report FM Sitharaman could also propose a threshold of Rs 15 lakh for the taxation of the income of non-residents who don’t pay tax in other jurisdictions, taking the sting out of the contentious budget proposal.
The government may also hike special additional excise duty on petrol to Rs 18 per litre and on diesel to Rs 12 per litre, to raise revenue for relief measures. Worth mentioning here is that special additional excise duty had been raised by Rs 2 each on these commodities on March 14. The sharp decline in global crude prices has created room for a reduction in prices but instead of passing on all the benefits of this to the consumer, the government may use some of the room to raise taxes to generate funds.
According to experts, a Rs 1 per litre hike in duty on petrol and diesel can generate Rs 13,000 crore revenue annually for the government. However, the actual realisation may be lower, as demand has fallen. The government has to raise the bound tariff rate on a commodity by amendments to the Finance Bill to get the flexibility to increase it by way of notifications during the year. The latest enabling provision will give the government room to raise duties further on petrol and diesel as global crude prices touch new lows.
“There have been several set of meetings to assess what needs to be done,” the business daily quoted an official as saying. “The government is working on the measures.”
