Reacting to the excise duty reduction on petrol and diesel announced by union government, Dr. Dipen Agrawal, President of Chamber of Associations of Maharashtra Industry and Trade (CAMIT) said that this step will indeed put some money in the pockets of middle & service class. However, it is to be seen whether this belated action can control the inflation or not. High fuel price leads to pressure on cost of raw materials, intermediate goods and have a cascading impact on price of final products.
To attain the desired results of reduction in excise duty, government should pursue with transport industry to pass-on the benefits by reducing freight. CAMIT reiterates it’s stand that, in the era of deregulated fuel pricing, if citizens bear the burnt of high crude prices or week rupee then they should be benefited by lower crude price or stronger rupee.
State government, instead of announcing reduction in price due to VAT component of excise duty, should take lead and reduce VAT/Surcharge on fuel added Dr. Agrawal.