Cesses are collected for a specific purpose, and they need not be shared with the States, as they are excluded from the purview of a divisible pool of taxes.
Heavy taxation on crude oil combined with a significant uptick in international crude prices is responsible for 2021 price rise.
In the FY22 Budget, an Agriculture Infrastructure and Development (AID) Cess was announced on select items, including petrol and diesel.
It is important to note that Not a single rupee of the cess collected on crude oil in the past 10 years was used for the intended purpose, like transferring to an Oil Industry Development Body, it was meant to finance.
Road and infrastructure cess forms the biggest share of excise duty.