TN, Centre blame game on as rising prices fuel pain
The State government is steadfast in its stand that tax rates on fuel would not be slashed to bring down the retail rates of petrol and diesel, citing the need to find funds for the various welfare schemes and measures. Instead, addressing the media here on Friday, Fisheries Minister D Jayakumar asked the Centre to offer relief to the public by reducing Central Excise duty.
By : migrator
Update: 2018-09-07 20:24 GMT
Chennai
Meanwhile, speaking to the media at his native Nagercoil, Union Minister of State for Finance and Shipping Pon Radhakrishnan maintained that the Centre alone could not bring down the fuel rates. The State government, he added, should slash the Value Added Tax on fuel in the interest of the development of the country.
Caught in the standoff are the people, who are paying more for fuel each passing day. On Friday, rates were Rs 83.13 and Rs 76.17 per litre of petrol and diesel respectively. A closer look at these claims shows that it perhaps is possible for both the governments to do its bit on this matter.
Meanwhile, Union Petroleum and Natural Gas Minister Dharmendra Pradhan said on Friday that fuel price hike in the country is due to international factors and it has now become essential to bring petrol and diesel under the purview of GST.
When MK reduced VAT in 2006
Hit by a sudden rise in price, the then State government headed by late DMK president M Karunanidhi had reduced VAT on petrol and diesel in 2006. In the case of diesel, it was reduced twice – first from 25 per cent to 22.43 per cent, and then to 21.43 per cent. It was three per cent reduction
for petrol.
It remained at this level for long, till March 2017, when the incumbent State government hiked VAT on both petrol and diesel: it went up to 34 per cent from 27 per cent for petrol, and to 25 per cent from 21.43 for diesel. Under this tax calculation, Rs 28.26 and Rs 19.04 goes as VAT for every litre of petrol (Rs 83.13 on Friday) and diesel (Rs 76.17) respectively.
In addition to this is the Central Excise duty, which was hiked multiple times to mop up revenue when the crude oil price crashed. It went up from Rs 9.20 per litre of unbranded petrol in November 2014 to Rs 19.48 per litre now; and from Rs 3.14 per litre of unbranded diesel to Rs 15.33 now.
Can fuel costs be controlled?
If the State and Centre are willing to cut a portion of VAT and Central Excise duty, petrol costs in Tamil Nadu can be fixed at Rs 67.57 and diesel at Rs 65.79
How ?
State govt agrees to restore VAT rate to pre-March 2017 rates, the prices will fall by Rs 5.82 for petrol and Rs 2.72 in the case of diesel. If the Centre too follows suit to cut Excise duty by half as suggested by Minister Jayakumar, petrol will see reduction of Rs 15.56 per litre and diesel by Rs 10.38
*Calculation on Friday’s fuel rates
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