CURRENT AFFAIRS | MARCH 28, 2026
CLAT GK + CONSTITUTIONAL LAW (TAXATION & FISCAL POLICY)
The Centre has slashed the Special Additional Excise Duty (SAED) on petrol by Rs 10 per litre (from Rs 13 to Rs 3) and on diesel by Rs 10 per litre (from Rs 10 to nil), effective March 27, 2026. The Finance Bill 2026 was passed by both Houses of Parliament, with the Rajya Sabha giving its nod on the same day. Simultaneously, export duties of Rs 21.5/litre on diesel and Rs 29.5/litre on Aviation Turbine Fuel (ATF) have been imposed to prevent domestic fuel shortages.
The move comes as global crude oil prices have surged past $100-122 per barrel following the near-closure of the Strait of Hormuz due to the US-Israel-Iran conflict. Oil marketing companies (OMCs) like Indian Oil, HPCL, and BPCL were absorbing under-recoveries of approximately Rs 24/litre on petrol and Rs 30/litre on diesel. The excise cut is expected to offset 30-40% of these OMC losses, though consumers are unlikely to see an immediate reduction at the pump.
Why This Matters for CLAT
Constitutional & Legal Framework
- Article 265: No tax shall be levied or collected except by authority of law. The excise duty reduction required legislative sanction through the Finance Bill.
- Article 246 + 7th Schedule: Excise duty on petroleum falls under Entry 84 of the Union List (List I), giving Parliament exclusive power. States levy VAT separately on petroleum.
- Article 110 (Money Bill): The Finance Bill is classified as a Money Bill, giving Lok Sabha primacy. Rajya Sabha can only recommend amendments within 14 days.
- Article 279A (GST Council): Petroleum is kept outside GST despite the Council’s power to recommend its inclusion. The dual taxation (Centre’s excise + State VAT) continues.
- Atiabari Tea Co. case (1961): SC held taxation can restrict freedom of trade under Art 301 if it directly impedes free flow of trade across state borders.
- ITC Ltd v State: Landmark on the interplay between central excise and state taxation powers on manufactured goods.
CLAT Exam Angle
This topic is a goldmine for CLAT 2027. Expect passage-based questions on:
- Constitutional provisions: Art 265 (no tax without law), Art 110 (Money Bill procedure), Art 246 (distribution of legislative powers)
- Federal fiscal relations: Centre vs State taxation on petroleum, GST Council recommendations, cooperative federalism
- Current affairs reasoning: Impact of West Asia conflict on Indian economy, crude oil price pass-through mechanism
- Legal reasoning: Whether excise duty changes require Parliament’s approval or can be done via executive notification
Key Facts at a Glance
| Parameter | Details |
|---|---|
| Excise Cut (Petrol) | Rs 10/litre (Rs 13 to Rs 3) |
| Excise Cut (Diesel) | Rs 10/litre (Rs 10 to nil) |
| Effective Date | March 27, 2026 |
| Diesel Export Duty | Rs 21.5/litre |
| ATF Export Duty | Rs 29.5/litre |
| Annual Fiscal Impact | ~Rs 1.5-1.6 lakh crore revenue loss |
| Crude Oil Price | $100-122/barrel (surged from ~$70) |
| Legislative Route | Finance Bill 2026 (Money Bill, Art 110) |
CLAT Mnemonic: FUEL TAX
F – Finance Bill = Money Bill (Art 110)
U – Union List Entry 84 = Central Excise power
E – Excise cut: Rs 10/litre on both fuels
L – Legislative sanction required (Art 265)
T – Two-tier taxation: Centre (excise) + State (VAT)
A – Art 279A = GST Council can recommend petroleum inclusion
X – eXport duties imposed on diesel & ATF to prevent shortages
Test Your Understanding
Practice Quiz — 10 CLAT-Style Questions
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