After backlash, Maharashtra may hike tax on alcohol to subsidise fuel rates

After backlash, Maharashtra may hike tax on alcohol to subsidise fuel rates
The state has not reviewed the duty on IMFL since 2013 (Representational Image, Courtesy: Anweshanam)

The Maharashtra government is considering increasing tax on liquor to subsidise fuel rates as petrol prices reached a new high on Friday, September 21. Diesel rates, however, remained unchanged for the third day in a row.

According to a price notification of state-owned fuel retailers, there has been no change in the prices of diesel today. The cost of petrol, on the other hand, has been hiked by 9 paise in Mumbai and 10 paise in New Delhi.

Following the revision, petrol is retailing at Rs 89.69 per litre and diesel at Rs 78.42 per litre in Mumbai. Meanwhile, in New Delhi, the petrol price has reached Rs 82.31 per litre and diesel is retailing at Rs 73.87 per litre.

A combination of a dip in rupee value against the US dollar and rise in crude oil prices has led to a spike in pump prices since mid-August. The rupee has lost over 13 percent, and crude has gained 35 percent, since the beginning of this year.

Amid the soaring prices and the resultant backlash from citizens, the Maharashtra government is mulling over increasing the excise duty on Indian-made foreign liquor (IMFL) to compensate for a reduction in the state-levied fuel tax.

“The idea is to increase the excise duty on IMFL, especially on the largely consumed mid-segment liquors, so that government would earn more revenue. Then we can reduce taxes on petrol and diesel and counter the criticism (of soaring fuel prices),” an official told PTI.

Incidentally, the duty on IMFL has not been reviewed since 2013.

Given that the state levies the highest tax on fuel rates in the country, the Maharashtra government has been facing flak for failing to provide any respite to motorists, especially after states like Karnataka, Andhra Pradesh, and West Bengal reduced taxes.

Back to latest news