The Left-UPA divide on the fuel price hike looked set to widen further with the Left on Monday accusing Congress-ruled states of failing to ease the burden on the aam admi by not reducing sales tax and excise duty substantially on petroleum products as they had done in Kerala and West Bengal.
Questioning the reluctance of Congress-ruled states, finance ministers of Kerala and West Bengal, Thomas Issac and Asim Das Gupta,respectively on Monday charged that rates of petroleum products in such states were the highest. They were in the Capital to attend a meeting of state finance ministers to discuss issue of sales tax on petroleum products.
??Kerala and West Bengal governments have substantially reduced sales tax on petroleum products. The average sales tax in the country is about 26%. But most of the Congress-ruled states like Andhra Pradesh and Maharashtra are yet to reduce their sales tax on oil products. Their rates are much higher than rest of the states,?? Issac told FE after the meeting.
The Kerala finance minister claimed that Congress-led states like Delhi had made only a nominal reduction in the sales tax. ??Why they are so much reluctant in reducing the tax on petrol and diesel,?? he asked. The duo also demanded that there be ??transparency?? in the pricing policy of petroleum products and aviation turbine fuel.
The Left has been carrying out a strong campaign against the fuel price hike by the government, starting with a five day agitation all over the country. It had also boycotted meetings of the petroleum consultative panel opposing the price hike.
Left ministers on Monday also said that the Centre?s policy of passing the burden onto states should be reviewed. ??There should be a uniform slab in deciding the sales tax,?? Issac said. UP chief minister Mayawati had also suggested that there should be ??uniform sales tax?? on petroleum products.
Das Gupta also said that the state finance ministers will soon meet to discuss the ??financial issues between the Centre and the state.?? ??We have decided to meet the thirteenth finance commission on this issue,?? he said. The CPM has been demanding ??due share?? for the states from the revenue generated through various taxes.
??Our forex kitty is increasing. Why cannot a part of it be used to take care of the increasing oil import bill, which in any case is paid in dollars…The way petrol and diesel are handled is not the state subject and states are being asked to take a burden,?? Dasgupta said.
The committee of state finance ministers decided to seek compensation of around Rs 4,000 crore from the central government on account of the revenue loss suffered by the states due to the reduction in sales tax on petrol, diesel and cooking gas.
??We would soon meet the Finance Minister P Chidambaram to discuss the issue. At least 50% of the loss should be met by the central government,?? Dasgupta said. On the issue of reduction in sales tax of aviation fuel prices, Dasgupta said: ??We will seek further data from the civil avaition ministry. The issue will be discussed on June 21 meeting in Srinagar.??
Dasgupta said there should be sought clarification from the central government on the the policy of fixing the price of petroleum products. The committee also said that the basic price of petroleum products (price before various taxes are added) should be uniform across states.