States may lose Rs 120 bn in share of central taxes over road & infra cess

While excise revenues have broadly been kept unchanged, states don't get a share in new cess created by reducing excise on fuel

While the excise duty on petrol and diesel remains effectively unchanged after the Budget, the shift of Rs 2 per litre from basic excise duty to road and infrastructure cess would reduce the share of tax revenue transfers to states by about Rs 120 billion (see chart 1). This, despite the fact that excise revenues have broadly been kept unchanged.



Finance minister Arun Jaitley introduced a new ‘road and infrastructure cess’ of Rs 8 per litre on petrol and diesel, replacing the older road cess of Rs 6 a litre (known as additional excise duty), and reducing