Chennai, November 20, : , Tamil Nadu Finance Minister Palanivel Thiaga Rajan ruled out a reduction in the state tax on petrol and diesel.He said Friday that the Union government must reduce its fuel taxes to 2014.
He said that it was not fair nor feasible for the State government to reduce taxes due to the Central government’s excessive taxes.
I reiterate my belief that the Union Government should reduce petrol and diesel taxes to levels comparable to 2014.
Rajan stated that such a move would automatically lower the taxation of States (since almost all States are subject to ad-valorem taxes).
Over the past seven years, the Union Government has increased steadily the tax levy on petrol and diesel.
He stated that the petrol and diesel basic prices and global import prices on the 01.08.2014 were the same as the rupee import prices.
The basic price for petrol was Rs 48.55/litre and diesel at Rs 47.27/litre as of 01.08.2014.
The basic petrol price was Rs 48.36/litre, while diesel’s was at Rs 49.69/litre.
The central taxes on petrol were Rs 9.48 per Liter and diesel was Rs 3.57 Per Liter.Rajan stated that the Tamil Nadu government taxes at that time were Rs 15.47 per gallon on petrol and Rs 11.23 per gallon on diesel.
Recalling the Tamil Nadu government’s reduction in petrol at Rs 3 per litre on 13.08.2021, he said that this would lead to a loss of revenue of Rs 1160 crore annually.
The Union Government announced on 03.11.2021, a reduction in tax of Rs 5 per gallon for petrol and Rs 10 per gallon diesel.
Rajan stated that Tamil Nadu levies “ad valorem” taxes on top of Union taxes.This move will lead to a reduction of petrol pump prices by Rs 0.65 (total Rs 5.65) and diesel pumps by Rs 1.10 (1 total of 11.10).It will also result in an annual revenue loss of around Rs 10.5 billion for the State.”
vj/pgh
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