Even as fuel prices stay above Rs 100 per litre, the government is yet to take a call on cutting fuel taxes.
Fuel at Rs 100 per litre is the number that is concerning all policymakers. They are more than aware that prices have shot through the roof. However, there is a trade-off between cutting fuel taxes and tax collection.
It is understood that the debate is only about this extra tax that has been levied during the first wave of COVID-19 and whether or not the government should think about it.
Every Re 1 cut in fuel taxes will lead to a revenue loss of around Rs 13,000 crore. So, the Rs 5 excise cut will lead to the loss of somewhere around Rs 65,000-70,000 crore annually.
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It won’t come as a big surprise if some decision is finally taken by the government in the next few weeks.
Watch the accompanying video of CNBC-TV18’s Sapna Das for more details.