No plan to cut fuel tax, says Kerala FM

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Two days after the central government slashed excise duty on petrol and diesel, the Kerala government on Friday reiterated that it has no plan to cut sales tax on fuel considering the state’s poor financial situation

By HT Correspondent, Thiruvananthapuram

Two days after the central government slashed excise duty on petrol and diesel, the Kerala government on Friday reiterated that it has no plan to cut sales tax on fuel considering the state’s poor financial situation.

The state government had introduced many welfare programmes during peak of the Covid-19 pandemic and they will be affected if tax on fuel was cut, Kerala finance minister KN Balagopal told reporters here. He said the Centre was forced to take such a decision in the wake of setbacks the ruling Bharatiya Janata Party suffered in recent by-elections.

“There is no need to reduce tax in Kerala. When the Centre reduced 10 and 5 for diesel and petrol, it has actually been reduced by 12.30 and 6.56 in Kerala due to the tax structure. The value-based structure is formulated in the state like this,” he said. He also criticised the Congress and BJP for demanding further tax cut.

“Both behave as if the Centre did a big thing, but it is not. After hiking the price for almost every day, it made a small reduction. In last seven years, it increased tax by over 31 but reduction was only slight,” Balagopal said, adding that states were not given the share of revenue collected through additional tax.

The minister said his government’s sales tax collection was not in tune with the soaring government expenditure so it can’t take any risk now.

After the Pinarayi Vijayan government came to power in the state in 2016, he said the state has not increased the fuel tax.

The Kerala assembly on Tuesday witnessed a war of words between the CPI(M)-led ruling front and the Congress-headed opposition over frequent fuel price hike in the country and the latter walked out of the House terming it as “state-sponsored tax terrorism.” Though the LDF government maintained that it was the Centre and not the state government which was responsible for the fuel price hike, the UDF members wanted it to forego the additional tax revenue generated on its sales for the sake of struggling commoners. (With PTI input)

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