5 June :The Congress President Sonia Gandhi has asked all the congress ruled states to reduce sales tax on petrol and diesel to offset the impact of the recent hike in fuel prices.
Four states played good Samaritan to people suffering from a hike in fuel prices by slashing taxes that made petroleum products a tad cheaper, even as the Prime Minister asked his colleagues to avoid foreign travel and cut back on spending.
Delhi, Bihar and Tamil Nadu followed West Bengal’s example on Thursday and announced cut in sales tax on fuel sales to cushion the impact of Wednesday’s steep price hike on users.
Congress President Sonia Gandhi and the BJP also separately asked chief ministers of states ruled by their respective parties to cut sales tax on petroleum products.
Petrol and diesel prices were hiked by Rs 5 and 3 a litre on Wednesday, respectively, and cooking gas by Rs 50 a cylinder, a decision that was marked by protests and shutdown in Left- ruled states of West Bengal, Kerala and Tripura on Thursday.
Prime Minister Manmohan Singh, who appealed to states to forego a part of their revenues from petroleum products, on Thursday, wrote to his colleagues, asking them to take austerity steps.
"As we ask the people to bear some financial burden… it is not only necessary from the resource conservation… but also as a moral duty to cut out wasteful expenditure in our own establishment," he said.
The appeal was followed by cut in sales tax on LPG by the Congress-ruled Delhi government, on diesel by DMK-ruled Tamil Nadu and on petrol and diesel by the NDA government in Bihar.
The Left-ruled West Bengal government has already slashed sales tax on petrol and diesel by up to five per cent giving a relief of Rs 2.12 and Rs 1.38 a litre on the two fuels respectively.
Uttar Pradesh Chief Minister Mayawati threatened to launch an agitation against the price hike, saying tax cut by states was not a permanent solution.
"We need to explain to the people the constraints and reasons that have compelled the government to introduce these measures. Simultaneously, however, it is equally necessary for us to introduce the utmost economy in our own administrations and establishments," Singh wrote to his ministerial colleagues.
Separately, the Finance Ministry directed all central ministries to stop holding conferences in luxury hotels and cut down non-plan expenditure by up to 10 per cent that would result in an estimated savings of Rs 6,000 crore to the exchequer this fiscal.
Tamil Nadu government said its decision to cut sales tax on diesel by two per cent would have a revenue implication of Rs 260 crore per annum.
The Delhi government would bear a burden of Rs 165 crore on account of reduction in sales tax and subsidy on the cooking gas (LPG), which would now be available to consumers for Rs 304.70 at a hike of just Rs 10 per cylinder from the existing price.
Elsewhere, a cooking gas cylinder would cost Rs 340.30.
"Central government, along with oil PSUs, has shouldered about 91 per cent of the Finance Ministry’s burden while ensuring full protection to economically vulnerable section of society with no increase in PDF kerosene prices…," Petroleum Minister Murli Deora wrote separately to 30 Chief Ministers of states and Union Territories, asking them to at least cut sales tax on incremental hike in fuel price.
LPG only Rs 10 costlier in Delhi
LPG cylinder is to cost only ten rupees costlier in Delhi; Sonia Gandhi asks party CMs to cut sales tax on petroleum products.The increase in LPG cylinder rate in Delhi will only be Rs 10 instead of Rs 50.
Delhi Chief Minister Sheila Dikshit announced sales tax cut and subsidy on cooking gas on Thursday evening.Earlier Congress President Sonia Gandhi asked party chief ministers to effect a cut in sales tax on petroleum products.
Deora asks CMs to cut sales taxes and other levies
Petroleum Minister Murli Deora has written to chief ministers asking them to cut sales tax on fuel saying the Centre was doing its bit of burden-sharing and states too should bear a part of the load.
"Central government, along with oil PSUs, has shouldered about 91 per cent of the finance ministry’s burden while ensuring full protection to economically vulnerable section of society with no increase in PDF kerosene prices while marginal hike in petrol, diesel and LPG rates," he wrote to 30 Chief Ministers of states and Union Territories.
He asked states to cut sales tax at least on incremental hike in fuel prices."I expect state governments will not be behind in sharing the burden arising from spurt in international oil prices," he said.
Talking to a news agency Deora said, the government was left with no other option but to marginally raise prices. "Per family burden of LPG price increase is Rs 2 per day," he said.
Deora’s appeal comes a day after the government announced a steep hike in petrol, diesel and LPG prices.
Prime Minister Manmohan Singh had also urged the states in his television address to the nation to slash state taxes and levies to put minimum burden on consumers.
The Prime Minister in his address on Wednesday asked states to reduce their taxes and levies as well, with the Centre having taken a revenue hit of Rs 22,660 crore by cutting duties.
"The Central government, oil companies and consumers are bearing a part of this immense burden. It is, therefore, incumbent on state governments, many of whom tax petroleum products substantially, to also contribute to this national effort by suitably reducing state taxes and levies," he had said.
Within hours of the decision taken by the Union Cabinet to hike petroleum prices on Wednesday, the Left-ruled West Bengal government slashed sales tax on petrol and diesel by up to five percent giving a relief of Rs 2.12 and Rs 1.38 a litre on the two fuels.
The Prime Minister said the central government has reduced taxation of petroleum products to the extent possible.But given its commitments for expenditure, taxes on petroleum products cannot be completely eliminated.
UPA Chairperson and Congress President Sonia Gandhi also asked party chief ministers to effect a cut in sales tax on petroleum products to provide some healing touch to "aam admi".
Congress is in power in around half a dozen states, prominent among them being Maharashtra, Assam, Jammu and Kashmir, Andhra Pradesh and Haryana.
Courtsey : DD NEWS