India cuts excise and import taxes on crude oil and fuel products

India recently decided to reduce custom and excise duties on diesel fuel, kerosene and cooking gas, while at the same time raising the administered prices of these products. The union government also appealed to state governments to reduce sales taxes. The price hikes were intended to reduce margin losses of state-run oil marketing companies. However, the tax cuts will reduce the union government’s revenue collections and could threaten the country’s ability to meet its fiscal deficit target, according to the country’s Finance Secretary,  Sunil Mitra. “Any amount of loss on account of revenue foregone would certainly put pressure on the fiscal deficit,” said Mitra.  India has set as a target to lower its fiscal deficit to 4.6% of gross domestic product during this fiscal year.  (June 27, 2011)