Bengal cushions hike with sales tax cut

(According to a late evening official release, petrol will cost Rs 52.20 a litre against Rs 48.98 earlier and diesel Rs 35.81 per litre against Rs 33.96 earlier in the state, factoring in all elements. Without the tax cut, the prices would have been Rs 54.29 and Rs 37.17, respectively.)

A few hours after the CPI(M)-led Left Front called a 12-hour bandh for Thursday, Dasgupta announced the cut in sales tax — from 25% so far to 20% for petrol and from 17% to 12.5% for diesel. This will mean a revenue loss of Rs 500 crore a year for the state Government.

“The state Government first of all urges the Central Government to reconsider the entire decision,” Dasgupta said. “Pending that reconsideration, the state Government, within its limited financial powers, has also taken the decision to reduce its own sales tax rates on petrol and diesel.”

Dasgupta said he would also convene a meeting “very soon” of the empowered committee of state finance ministers, which he heads, to discuss the impact of the hike in petroleum products. “We would also like to point out that despite the slight reduction in the rate of central excise in petrol by Re 1 per litre, the existing rate of central excise on petrol is as high as 50%.”

He said the Centre should reduce its excise further and take other steps like tapping the foreign exchange reserves to pay for imports and stepping up domestic production of crude petroleum.

Kerala too headed for tax cut

KOCHI: Kerala Chief Minister V S Achuthanandan on Wednesday said his Government would slash sales tax on petroleum products to cushion the price hike, but declined to mention the extent of the cut. He said the extent would be worked out with his Finance Minister this weekend.

New Prices

Petrol

• Rs 52.20/ litre (with tax cut)

• Rs 54.29/ litre (without tax cut)

Diesel

• Rs 35.81/ litre (with tax cut)

• Rs 37.17/litre (without tax cut)