Chennai: The Tamil Nadu government on Sunday described the Centre reducing taxes on petroleum products as ‘partial’ and stated “it is a ways neither fine nor cheap to query States to diminish their taxes.”
Tamil Nadu Finance Minister Palanivel Thiaga Rajan stated the central government had never consulted states when it elevated the taxes and that his negate changed into already incurring lack of over Rs 1,000 crore which skill of the earlier tax decrease announced by the union government in November 2021. Despite the tax discount announced on Saturday, the rates had been nonetheless high in contrast to 2014, he identified.
“It is miles pertinent to level out that the Union had never consulted the States after they elevated the taxes on petrol and diesel more than one times. The exorbitant magnify in taxes by the Union Government has been finest in part reduced through their cuts and the taxes continue to be high in comparison to the 2014 rates.”
“Subsequently, it is a ways neither fine nor cheap to query States to diminish their taxes,” he stated in a observation, basically based completely mostly on Union Finance Minister Nirmala Sitharaman asserting a discount in excise responsibility on petrol by a epic Rs 8 per litre and that on diesel by Rs 6.
Thiagarajan additional stated it changed into ‘heartening’ to expose the Centre has “at closing heeded to the repeated requests of the Tamil Nadu Government to diminish the taxes on petrol and diesel, which had been egregiously elevated by the Union Government from 2014 to 2021.”
He recalled the MK Stalin-led DMK government effecting a VAT discount in August 2021, that resulted in a Rs 3 per litre decrease within the price of petrol.
This resulted in an annual income lack of Rs 1,160 crore to the negate government but this changed into carried out to abet the of us despite the monetary strain inherited from the outdated AIADMK government.
“The Union Government’s levies on petrol like long gone up substantially within the previous 7 years. Even though the income to the Union Government has elevated manifold, there has now not been a matching magnify within the revenues to States. That is since the Union Government has elevated the cess and surcharge on petrol and diesel while reducing the conventional excise responsibility that is shareable with the States,” he averred.
On August 1, 2014 central taxes had been Rs 9.48 per litre on petrol and Rs 3.57 per litre on diesel.
Before the discount of taxes on petrol and diesel by the Union Government in November 2021, the levy of tax, in conjunction with cesses and surcharges on petrol changed into Rs 32.90 per litre and Rs 31.80 per litre on diesel.
“This changed into reduced to Rs 27.90 per litre for petrol and Rs 21.80 per litre for diesel. Now, it has additional been reduced to Rs 19.90 per litre for petrol and Rs 15.80 per litre for diesel,” he stated.
Even though the Centre had reduced the taxes, it changed into nonetheless ‘better’ than the 2014 rates by Rs 10.42 per litre for petrol and Rs 12.23 for diesel.
“Subsequently, there would possibly be a sturdy case for the Union Government to additional decrease its taxes,” the minister argued.
While the November 2021 tax discount by the Centre had resulted in Tamil Nadu incurring an annual income lack of Rs 1,050 crore, the most fresh one will cause an extra lack of Rs 800 crore a year, Thiagarajan stated.
This would possibly perhaps perhaps put a wide strain on the funds of the states.
“Even though this government inherited a precarious fiscal keep from the outdated dispnesation and incurred extra expenditure in the direction of Covid-19 relief activities, it reduced the taxes on petrol in just a few months after assuming workplace, for the welfare of the of us. Tamil Nadu, despite its dinky taxation powers, has taken proactive measures to diminish the tax burden on the of us of the Train,” he well-known.
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