Maharashtra, Rajasthan and Kerala have reduced VAT on petrol and diesel following a call by Finance Minister Nirmala Sitharaman to give more relief to consumers after the Center cuts excise duty, though some other states are unable to take more pressure on revenue. Reluctant to refer. Senior Congress leader P Chidambaram on Sunday wondered whether states can waive the revenue from Value Added Tax (VAT) on petrol and diesel unless the Center gives more funds or grants them more, His position is compared to being between Satan and Diesel. deep ocean.
The Shiv Sena-led Maharashtra government slashed VAT on petrol by Rs 2.08 per liter and on diesel by Rs 1.44 per liter. In a statement issued by the government, it has been said that due to this decision, there will be a loss of Rs 2,500 crore annually to the exchequer. However, the DMK-led government in Tamil Nadu said it was neither fair nor reasonable to expect states to reduce their taxes. State Finance Minister Palanivel Thiaga Rajan said the central government never consulted the states when it hiked taxes and Tamil Nadu has already suffered over Rs 1,000 crore due to the first tax cut announced by the central government in November 2021. There was damage.
Despite the tax cuts announced by the Center on Saturday, the rates were still higher than in 2014, he pointed out. “The central government levy on petrol has increased significantly in the last seven years. Although the revenue of the central government has increased manifold, the revenue of the states has not increased equally. “This is because the central government has increased the cess and surcharge on petrol and diesel while reducing the basic excise duty to be shared with the states,” he said.
After cutting excise duty on petrol by Rs 5 per liter and diesel by Rs 10 per liter in November 2021, 25 states and union territories had cut VAT to provide further relief to consumers suffering from record-high retail prices. . States ruled by non-NDA parties such as Maharashtra, Andhra Pradesh and West Bengal did not do so. Reacting to the minister’s remark that states were not consulted by the Center before raising fuel prices, BJP Tamil Nadu president K Annamalai wondered whether such a practice was followed during the erstwhile UPA regime. of which the DMK was a major component. Speaking to reporters, he gave an ultimatum of “72 hours” to the ruling DMK to implement its poll promise on cutting fuel prices. Tamil Nadu’s main opposition AIADMK also urged the ruling DMK to implement its poll promise of reducing the prices of petroleum products.
However, the Left Democratic Front government in Kerala on Saturday announced a cut in state tax of Rs 2.41 and Rs 1.36 per liter on petrol and diesel prices, respectively, after the Center slashed fuel prices. Rajasthan Chief Minister Ashok Gehlot also said that the state government will reduce VAT on petrol by Rs 2.48 per liter and on diesel by Rs 1.16 per liter. In Madhya Pradesh, Congress leader Kamal Nath demanded that the BJP government reduce VAT on petroleum products to further reduce rates. Bahujan Samaj Party chief Mayawati said it is the duty of not only Uttar Pradesh but also other states to immediately announce reduction in VAT on fuel.
In BJP-ruled Karnataka, Chief Minister Basavaraj Bommai said his government would consider further cuts in fuel tax. “The decision (of the Centre) has come on Saturday night, let’s see, we will consider it,” Bommai told reporters here in response to a question.
Bommai was non-committal on further cuts in fuel tax by the state government last month and said any decision in this regard would be taken after looking at the state’s economy. A source in the Goa government said that the Pramod Sawant-led government will not further reduce VAT on petrol and diesel as it may hurt the economy.
Goa levies VAT of 26 per cent on petrol and 22 per cent on diesel. The ruling Trinamool Congress in West Bengal said the state would cut taxes once it lifts the “economic blockade” and releases funds due to the state.
TMC national spokesperson Sukhendu Shekhar Ray said on Saturday that West Bengal will reduce fuel prices after the Center clears the dues of Rs 97,000 crore. Last month, the Chief Minister of West Bengal Mamata Banerjee She said that she would reduce the tax on petroleum products in the state after the central government clears all the dues owed to the state.
Petrol price on Sunday was reduced by Rs 8.69 per liter and diesel by Rs 7.05 per liter following the government’s decision to cut excise duty on auto fuels. Former finance minister Chidambaram said that states are getting very little by sharing duty on petrol and diesel.
“I wonder if they can afford to give up that revenue unless the Center gives more money or grants them more,” Chidambaram said. In a series of tweets, he said, the situation is like being between the devil and the deep sea.
Announcing the duty cut via tweet, Finance Minister Sitharaman called on all state governments to cut local sales tax or VAT as well. She said, “I want to encourage all the state governments, especially those states, where the cuts were not made during the last round (November 2021), to implement similar cuts and give relief to the common man, ” He said.
Welcoming the move, Oil Minister Hardeep Singh Puri said, “I would like to note this despite the second reduction in central excise duty, petrol and diesel prices in states like Maharashtra, Rajasthan, West Bengal, Tamil Nadu, Andhra Pradesh, Jharkhand and Kerala. I want to highlight the fact. It is around Rs 10-15 more than in BJP ruled states.” Rates vary from state to state depending on the incidence of local taxes such as VAT. Andhra Pradesh has the highest VAT on petrol and diesel in the country, followed by Rajasthan and BJP-ruled Madhya Pradesh. “This (higher prices in non-BJP ruled states) is due to the refusal of their respective state governments to reduce VAT. Time has come for these states to wake up and reduce VAT to provide relief to their consumers,” Puri said. The Congress government in Rajasthan had cut VAT after the November 2021 decision. Party-ruled Punjab at that time saw the biggest reduction due to reduction in VAT rates.
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