Politics

वैश्विक हालातों को देखते हुए अर्थव्यवस्था को आगे बढ़ाने के लिए त्वरित निर्णय ले रही है मोदी सरकार

Oil companies that refine crude oil and export it in the form of petrol and diesel, imposing export tax on their products will control the export trend of these companies.

From July 1, 2022, the Central Government has increased the export tax on petrol, diesel and aviation fuel exported from India. At the same time, the import duty on gold imported into India has been significantly increased. To control gold imports to India, the customs duty on gold has been increased from 10.75 per cent to 15 per cent. Rs. 23,250 per tonne cess has been imposed; This cess will not apply to crude oil imports. Special additional excise duty / cess on petrol and diesel exports, Rs. 6 and Rs. 13 per liter have been imposed. Export of aviation turbine fuel at Rs. A special additional excise duty of Rs. The above measures will have no effect on local fuel prices.

The ongoing war between Russia and Ukraine has pushed up the price of crude oil in the international market these days. Many European countries, including the United States, have imposed sanctions on Russia, making it difficult for Russia to export crude oil and gas to international markets. At such times, India has come to the aid of Russia and has moved towards importing crude oil from Russia (with huge discounts and the payment of this crude oil in rupees / rubles instead of dollars). With huge capacity available in India to refine crude oil to make petrol and diesel and some private sector companies are also involved in this work, these companies started refining and exporting crude oil imported from Russia to petrol and diesel at international prices. Make a big profit on this item. This type of behavior is called windfall gain. The central government has now imposed a tax on this windfall gain. Also, all these companies have been asked to sell a portion of the petrol and diesel they produce after refining crude oil in India, otherwise pay export tax. In India, it is mandatory to sell 50 per cent petrol and 30 per cent diesel, otherwise these companies will have to pay export tax on the export of these items.

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Oil companies that refine crude oil and export it in the form of petrol and diesel, imposing export tax on their products will control the export trend of these companies. By producing petrol and diesel in the country, these companies are exporting it with the objective of making more profit, while they should help increase the supply of these products in the country itself. Private sector oil companies are increasing the import of crude oil from Russia at cheaper rates and refining and exporting it. Russia, which used to import only 2 per cent of its crude oil, has now grown to 20 per cent at a discount. Therefore, these companies are importing crude oil, refining it and exporting it to India at a higher rate. For this reason, the central government has imposed an export tax on petrol and diesel exports, which will increase the supply of petrol and diesel in the country.

Similarly, while India’s trade deficit has been steadily rising, it has been noticed that this is mainly due to the huge increase in imports of two items. One is the sharp rise in the price of crude oil in the international market, which has led to a huge amount of foreign exchange being spent on crude oil imported into India. Secondly, this year has also seen a big increase in gold imports. Therefore, to reduce gold imports, the import tax on gold has been increased. Gold imports should also be stopped as gold falls into the category of non-productive assets anyway. Thus, both of the above decisions will reduce the ever-increasing trade deficit in foreign trade.

There is another important reason behind the above decisions taken by the Central Government. The fiscal deficit has risen sharply in all countries of the world, including India, especially since the Corona epidemic. Different countries are making decisions according to their own circumstances to control it. In India too, the cost of food subsidy is likely to increase by about Rs 80,000 crore in the financial year 2022-23. The amount of fertilizer subsidy given to farmers is also likely to increase significantly due to Russia-Ukraine. Due to the sharp rise in fertilizer prices in the international market, the reduction in excise duty on petrol and diesel by the central government has cost the central government about Rs. An additional burden of Rs 85,000 crore is likely. Similarly, due to the implementation of the Ujjawala scheme, in the financial year 2022-23, the central government will have to bear an additional burden of Rs 6,000 crore and the central government of India will have to bear an additional burden of Rs 15,000 crore. The latest exemption given to exporters. Overall, in the financial year 2022-23, the central government will have to bear an additional burden of Rs 3 lakh 30 thousand crore. If the above mentioned tax related decisions are not taken by the Central Government, the financial year 2022-23 could lead to an uncontrolled fiscal deficit.

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If the fiscal deficit is not kept under control, the rate of inflation will start rising rapidly. Second, if the trade deficit of foreign trade and the current account deficit are not controlled, the rupee starts depreciating in the international market and the prices of imported goods in the country go up. This is also one of the main reasons for the rise in inflation in the country. Therefore, it has become necessary for the Central Government to take the above decision to control the fiscal deficit and the current account deficit. However, this will not affect the price of goods in the Indian domestic market. The windfall tax on windfall profits will also have to be paid by all the concerned companies from their profits, so these companies and the public will not be affected. The cess will also not affect the prices of petroleum products locally. The કંપની 40 per barrel profit that oil companies were getting will not go directly to these companies, but some of it will also go to the central government. Although state-owned oil companies normally transfer such profits to the central government as dividends at the end of the year, now private sector oil companies (especially Reliance) will also have to pay taxes to the center in case of contingencies. The central government has taken this decision considering the interests of the country as paramount. European countries, Britain, etc. have taken such decisions and imposed an additional tax of about 25 per cent.

The above decisions taken by the Central Government on export and import tax will be reviewed every 15 days as crude oil prices continue to rise in the international market and changes in the rules will be possible if crude oil prices start falling in the near future.

-Prahlad Sabnani

Retired Deputy General Manager

State Bank of India

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