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Finance Minister Nirmala Sitharaman clarified on Sunday that the reduction in excise duty of ₹8 per liter on petrol and ₹6 per liter on diesel was entirely done in the Road and Infrastructure Cess (RIC) – which cannot be shared with States.

The basic excise duty which is shared with states was not affected, Sitharaman said. “Consequently, the entire burden of these two duty reductions is borne by the Centre,” added the Minister of Finance.

In November last year, the government reduced central taxes on petrol by ₹5 per liter and diesel by ₹10 per litre. The reduction was carried out entirely in the Cess Route and Infrastructure at the time.

“The duty reduction carried out yesterday has an implication of ₹1,00,000 crore per annum for the Centre. The duty reduction carried out in November 2021 has an implication of ₹1,20,000 crore per annum for the Centre. Full revenue implication for the Centre, out of these two the duty reductions are therefore ₹2,20,000 crore per annum,” the finance minister said.

In a bid to control soaring inflation, the central government on Saturday announced a sharp cut in central excise duties on gasoline and diesel.

Following the Centre’s move, the Maharashtra government reduced the value added tax (VAT) on petrol and diesel by ₹2.08 and ₹1.44 per litre, respectively. In various districts of Maharashtra, petrol prices had crossed the ₹120 per liter mark before the tax cut. The highest petrol price in the country was in the Parbhani district of the state.

Rising fuel prices in India due to high crude oil prices have led to a debate over which government, state or central, should cut taxes to keep prices in check.

India imports about 86% of its annual crude oil needs. Brent crude – the international benchmark – is hovering around $110 a barrel amid the Russian-Ukrainian war. A stronger US dollar added to the cost of crude oil.

Last week, Fortune India reported that the price of a liter of gasoline in India is more expensive than in most neighboring countries like Nepal, Pakistan and Bangladesh. Gasoline prices in India, however, are cheaper than in developed countries like the UK, Germany, and France, among others.

In a series of tweets, Sitharaman, citing data from RBI, said the Narendra Modi government incurred development expenditure worth ₹90.9 lakh crore between 2014 and 2022,” she said.

Expenses incurred by the Narendra Modi government include ₹24.85 lakh crore spent so far on food, fuel and fertilizer subsidies and ₹26.3 lakh crore on capital creation, the minister of finance said. Finance. “In the 10 years of UPA, only ₹13.9 lakh crore has been spent on grants,” she added.

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