Kerala CM lambasts statement on fuel tax
‘Let it be made clear that Kerala has not increased sales tax on petroleum products even once in the last 6 years,’ stresses chief minister
Kerala Chief Minister Pinarayi Vijayan joined his counterparts in the opposition-ruled states on Thursday condemning Prime Minister Narendra Modi’s statement on fuel tax.
“Let it be made clear that Kerala has not increased sales tax on petroleum products even once in the last six years,” the chief minister said in a statement here.
“Since 2014, the central government has increased taxes on petroleum products 14 times and reduced them four times.” Modi had on Wednesday asked the states to cut their value added taxes saying 42 revenue from the federal levies on these products already go to them.
During his interaction with the chief ministers on the rising cases of COVID-19 cases, Modi named and shamed the states that were levying high taxes during the pandemic.
“In order to reduce the load of petrol and diesel prices, the central government had reduced the excise duty and requested the states also to follow suit,” he said.
“Some states reduced taxes but some did not pass on the benefits to the people, leading to higher cost of petrol and diesel in these states.” This is not only injustice towards the people of the state, Modi added, but harms the neighbouring states also.
He said states like Karnataka and Gujarat undertook the tax reduction for the welfare of the people despite revenue losses while their neighbours earned from higher taxes.
The prime minister said Maharashtra, West Bengal, Telangana, Andhra Pradesh, Tamil Nadu, Kerala, Jharkhand ignored his request to cut fuel taxes “for some reason.” “I urge all the states to work as a team in this time of global crisis following the spirit of cooperative federalism,” he added.
Currently, Kerala receives Rs26.34 as tax on a litre of petrol, while the federal government collects Rs27.90. In the case of diesel, it is Rs19.14 and Rs21.80.
Vijayan said, “During the meeting he (Modi) mentioned the names of some states, including Kerala, and said that they were not reducing the sales tax on petroleum products.” “He also referred to cooperative federalism. It should be noted that the increase made by the Centre is not a basic excise duty shared with the states,” Vijayan said.
Senior Congress party leader and former chief minister Oommen Chandy, meanwhile, said both leaders were blaming each other while continuing to plunder the people.
“(They) are blaming each other for the massive looting by the central and state governments,” he said in a statement here.
“With more than half of the total fuel price being taxes collected by both almost equally, the two are engaged in a tug-of-war to hide it from the people.”
When prices went up while he was in power, he said, the people of Kerala were given relief of Rs6.192 billion by foregoing additional tax revenue it brings proportionately.
“During the Congress government, the excise duty on a litre of petrol was just Rs9.48 and now it is Rs27.90. It was Rs3.65 then on diesel and now it’s Rs21.80,” he said.
“The excise duty has tripled. This is the daylight robbery. Then he gives a slight relief while hiding the truth and takes credit for it.” He said the Let government led by Vijayan was enjoying inside while protesting against the federal government’s fuel price hike.
The state receives an additional tax commensurate with the increase in the price of petroleum products.
The state collects Rs34.64 from a litre of petrol and Rs23.70 from a litre of diesel in various levies. Kerala receives more taxes than the Centre.
“Under the Congress government, oil prices peaked at $ 150 a barrel in 2008. It controlled fuel prices by subsidising Rs1.25 trillion,” he said.
“The price of crude oil in 2014 was $ 112 per barrel. But petrol retailed at Rs74.33 and diesel Rs60.77. Currently, crude is at $ 104 but retail prices Rs117 and Rs103.” He said the federal government stopped subsidies and prices remain high even though they import crude from Russia at $30 a barrel now.
“People are not geting any benefit from it,” he pointed out. “Both should be prepared to follow the example of their predecessors in controlling fuel prices.”