- Muralitharan Kasi Viswanathan
- BBC Tamil
Image source, Getty Images
Indian Prime Minister Narendra Modi’s call for state governments to reduce vehicle fuel prices has caused controversy nationally. Chief ministers of non-BJP ruling states have reacted strongly to the PM’s comments on the issue. What happened in this affair? Here are some questions and answers for your understanding.
K. Where and what did Prime Minister Narendra Modi say about fuel prices?
P. On April 27, Indian Prime Minister Narendra Modi held consultations with Chief Ministers on the rising incidence of corona infection in India. Then he talked about petrol prices.
“Last November, the central government reduced the excise duty on petrol and diesel to reduce the burden of rising prices. Similarly, the federal government asked the states to reduce the local tax. Some states reduced the tax, but many states did not provide any benefit to the people. The price continues to be high and this is an injustice to the people of these states.
The states of Maharashtra, West Bengal, Telangana, Andhra Pradesh, Kerala, Jharkhand and Tamil Nadu did not listen to the central government. So the people of those states are constantly increasing the burden.
Without tax cuts, Karnataka could have earned Rs 5,000 crore and Gujarat Rs 3,500 crore. So now you have to do what you should have done last November, reduce the value added tax and give that benefit to the people and cooperate. “
K. What did the Chief Ministers say to the Prime Minister of India?
P. West Bengal Chief Minister Mamata Banerjee reacted strongly to the Prime Minister’s remark. “Today’s discussion with the Prime Minister was biased and misleading. We have been giving a subsidy of one rupee for every liter of petrol for the last three years.
Telangana Chief Minister K. Chandrasekara Rao also sharply criticized Prime Minister Modi. “Instead of asking the states to reduce the tax, why shouldn’t the central government reduce the tax? The Telangana government last raised the price of fuel in 2015. After that it did not raise the price.
Image source, MK STALIN
Chief Minister of Tamil Nadu M.K. Stalin also slammed the Prime Minister. “Since coming to power in 2014, the central government has fully absorbed the surplus revenue from the fall in oil and diesel prices by not reducing petrol and diesel prices accordingly, despite the sharp fall in crude oil prices. , So the entire billions of crores of revenue available to the central government itself.
In the run-up to assembly elections in some states, the federal government has drastically reduced taxes on petrol and diesel ahead of the election. Following the election, the federal government has raised the price of the next week’s by more than ever before, placing an additional burden on the people.
All these are well known to the people of Tamil Nadu. Who are really proactive in reducing petrol prices; I leave it up to the people to decide who pretends to lower the price of petrol and put the blame on others. “
K. To what extent is petrol and diesel taxed in Tamil Nadu?
P. According to the information provided by the Government of Tamil Nadu, as on April 26, the base price of a liter of petrol was Rs. 56.70. The excise tax, including cess, is Rs. 27.90. State Government Value Added Tax Rs. 22.54. Transport cost is Rs. 0.15. The commission for the dealer is Rs. 3.56. In the end, the price of a liter of petrol in Chennai is Rs. 110.85. In 2014, the price of a liter of petrol was Rs. 75.74.
The basic price of a liter of diesel is Rs. 58.29. The excise tax, including cess, is Rs. 21.80. State Government Value Added Tax Rs. 18.45. Transport cost is Rs. 0.15. The commission for the dealer is Rs. 2.25. In the end, the price of a liter of diesel in Chennai is Rs. 100.94. In 2014, the price of a liter of diesel was Rs. 62.27.
K. What is the position of the Government of Tamil Nadu regarding the increase in petrol and diesel prices?
P. Tamil Nadu Finance Minister P.D.R. According to Palanivel Thiagarajan, it is impossible to reduce the tax on fuel. In his statement, he pointed out that after the implementation of the GST, the tax collection power of the state government has been greatly reduced.
The finance minister also said that tax revenue had been affected by the spread of Govt-19 and that expenditure had increased, adding that it was up to the central government to reduce chess and surcharges and give the states a fair share of the federal tax levied on petrol.
He said the federal government should impose higher taxes and not tell state governments to reduce taxes and bring chess and surcharges back to where they were in 2014.
K. Why is the Tamil Nadu government refusing to reduce taxes?
P. Tamil Nadu Finance Minister P.D.R. According to Palanivel Thiagarajan, the tax on petrol was reduced by Rs 3 last August to Rs. 1,160 crore revenue loss. According to the central government, the tax on petrol and diesel in 2019-20 will increase by Rs. 2,39,452 crore. However, in 20-21, the revenue was Rs. 3,89,622 crore.
However, while the State of Tamil Nadu received Rs 1,163.13 crore from this revenue in 2019-20, that amount has come down to Rs 837.75 crore by 20-21.
On November 11, the central government reduced the tax on petrol by 5 rupees and the tax on diesel by 10 rupees. As a result, the tax revenue available to the state government was reduced to Rs 1,050 crore.
Therefore, the state government cannot reduce its taxes in this context, says the Tamil Nadu Finance Minister.
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