You roll back, then we cut: Left to UPA

Reducing sales tax on petrol and diesel to cushion the price hike is becoming a political tool more than a fiscal one.The Left said today it, too, would reduce sales tax...

Reducing sales tax on petrol and diesel to cushion the price hike is becoming a political tool more than a fiscal one.

The Left said today it, too, would reduce sales tax but only after the Centre rolled back the price hike. A stand echoed by the Opposition NDA which alleged that the UPA was using “political pressure” on states to reduce their taxes. And, in Maharashtra which was the first to announce this cushion—prompting the Congress to ask its states to replicate the “Maharashtra model”—the party’s increasingly restive ally, the NCP, said it won’t let it happen.

“The UPA government at the Centre must first roll back petrol and diesel prices. If it does that, then Left-ruled state governments will follow suit and forego their share of revenue from the additional sales tax,” CPM Politburo member and MP Sitaram Yechury told The Indian Express today.

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The Left Front government in West Bengal will earn an additional sales tax of 77 paise per litre of petrol and 36 paise per litre of diesel following the hike. Currently, West Bengal levies 27.78% sales tax on petrol and 20.73% on diesel. The figures for Kerala are 26.04 and 22.42 respectively.

The Left parties and their allies are observing a nationwide protest on the price hike tomorrow with Left trade unions in the financial sector, railways and coal.

“We have not told the government to forego any revenues. We are only telling them to give up the extra revenue collected because of the rise in international crude prices once they have met their targets, and then our state governments will forego their share of the additional sales tax,” Yechury said.

The CPM, which concluded its three-day central committee meeting in Hyderabad this weekend, believes that the decision by some Congress-ruled state governments to reduce sales tax is mere “tokenism.”

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Echoed exactly by the Opposition NDA as it raised the pitch of its protests by fielding former prime minister Atal Behari Vajpayee to lead about 100 MPs courting arrest at Jantar Mantar today.

Vajpayee was joined by leader of the Opposition in the Lok Sabha L K Advani, JD(U) president Sharad Yadav and Shiv Sena leader Manohar Joshi. Similar protests are planned in state capitals and district headquarters on June 19.

But before the NDA protest, BJP president Rajnath Singh called up RSS general secretary Mohan Bhagwat to express his concern over an Organiser editorial that doubted the “honesty” behind the BJP’s protests when its governments were unwilling to cut sales tax.

Sources in the BJP said Bhagwat claimed the editorial did ‘‘not reflect RSS views.’’

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With a huge price-chart as his backdrop, Vajpayee said: “We will not give up— we will take it to conclusion…A strange phenomenon has emerged with states being asked to share the burden. We have no objection if states cut taxes on their own. But it would be a joke if the Centre uses its pressure on states to slash their taxes.’’ The Opposition, Vajpayee said, ‘‘would force the Centre to reduce its customs and excise duties to bring down fuel prices.’’

As for ally NCP, which handles the finance portfolio in Maharashtra, it said the Congress was playing to the gallery. “Sales tax is a major source of revenue generation for the state and any reduction will only affect other areas where spending has been allotted. If the depletion is large, we are firmly opposed to it,” NCP spokesperson Ratnakar Mahajan said here.