Petrol and Diesel Might Face Imposition of Swachh Bharat Tax

Fuel cost might soon face a tax imposition of 0.5%. This could come in effect if the decision of Indian Government to impose Swachh Bharat tax on petrol and diesel is finalised. This tax was previously introduced on many other services as the government is aiming at a total collection of Rs. 2.23 lac crore by October 2019 with the help of this tax. The final announcement of this tax imposition might take place in the budget announcement in February after getting approved by the Finance ministry. The proposal for this tax has been given by Niti Aayog to raise funds, based on suggestions by a sub-group of Chief Ministers.

Speaking on the recommendations to introduce a tax on petrol and diesel, one of the officials said, "Government is considering all options to raise funds for the programme and one or more of these could be announced as we go forward." He added, "It is very comprehensive in its coverage and requires huge amounts of funds to cover all aspects of the mission." The sub-group of Chief Ministers stated, "The sharing pattern of funds for this programme between the Centre and States may be in the ratio of 75:25 while for hilly states it may be kept at 90:10," with the larger proportion coming from the Centre.

Imposing this Swachh Bharat tax might result in an increase of petrol and diesel prices after witnessing a fortnightly decrease for the last two months. The fuel prices were last increased in November 2015 and are decreasing since then due to a drop in the cost of crude oil in December 2015.

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