New Delhi: Prime Minister Narendra Modi’s call for certain states to reduce VAT for petrol and diesel in “national interest” to benefit the common man has not gone down well with all. Opposition leaders today lashed out at the BJP-led administration, wondering why the Centre did not cut excise tax or bring petrol, diesel and LPG under GST. Earlier this month too, Opposition parties had taken potshots at the PM and the BJP as fuel prices rose by around Rs 10 through successive hikes.
The Congress today urged the BJP-led Central government to reduce excise taxes. It also called on the ruling party to account for Rs 26 lakh crores that it had purportedly earned in fuel taxes over the past eight years.
“Haryana has highest VAT on petrol-diesel. Fuel-prices are increased if price rises in international markets but when wheat prices increase internationally, farmers don’t get increased MSP on it. Center is evading from its duty on fuel-price hike,” added Congress leader Deepender S Hooda.
“PM today spoke much on petrol-diesel rather than health and the meeting turned out to be a political meeting. PM Modi should bring these (petrol, diesel and LPG) under GST and formulate one policy for the country,’ contended Jharkhand Health Minister Banna Gupta.
“PM Modi is particularly quoting only opposition-ruled states to reduce taxes on fuel. He won’t say that Gujarat or Karnataka should reduce the taxes. The quantum of tax collected by government of India is three times what is collected by these states. The Central govt talks about one thing but they do something else. They need money, they talk about $5 trillion economy but are selling PSUs like a poor family in distress,” alleged DMK MP TKS Elangovan.
During a meeting with the Chief Ministers of various states to take stock of the ongoing COVID-19 pandemic today, the PM had said that he was “praying” for the other states to “reduce VAT now even after a delay of six months” to help people.
“Centre reduced the excise duty on fuel prices last November and also requested states to reduce tax. I am not criticizing anyone but request Maharashtra, West Bengal, Telangana, Andhra Pradesh, Kerala, Jharkhand and Tamil Nadu to reduce VAT now and give benefits to people,” the PM said.
Retail fuel prices are a combination of the base price (which is based on international oil costs), central excise duty and state taxes. As lawmakers have emphasised at various points of time, both the Centre and the states rely on the collection of taxes from fuel to meet developmental and welfare goals.
In November last year, the government had cut excise duty on petrol by Rs 5 per litre and that on diesel by Rs 10 a litre to give reprieve to consumers battered by record-high retail fuel prices. The announcement had been matched by 22 states and Union Territories ruled by the BJP and parties allied to it, with VAT rates being cut in different proportions.