Maha govt not likely to reduce sales tax on petrol
June, 05th 2008
It seems, decision by state governments like West Bengal, which announced to reduce the rates of sales tax on petroleum products and likely announcement by Gujarat government on similar lines is putting pressure on Maharashtra government also to take similar action.
State Finance Minister Jayant Patil who had a meeting with the officials from sales tax department and finance ministry is going to meet Chief Minister Vilasrao Deshmukh late in the night to discuss the issue and cabinet meeting will be also called very soon, told sources close to development. There is likelihood of state might reduce the sales tax on petroleum products by four per cent , sources added,
When contacted Patil said, "he has called the meeting of the officials from sales tax department and finance ministry to assess the likely impact of the hike in the prices of petroleum product and in meeting we will discuss thread bare about the issues like the incremental revenue state will get due to price rise and whether this will affect the sales volume of petroleum products or not etc and then only we will be in position to form some opinion".
Besides this we will also have to take in to consideration fact that, state will also have to spend more because of price rise as rise in the prices of the petroleum product will also have an impact on inflation figure, he pointed out.
So whether by reducing the sales tax on petroleum product, we can give some relief to consumer can be known only after we have detailed internal discussion, he said.
Speaking with Business Standard president of the Maharashtra Petroleum Dealers Association Uday Lodh said, Maharashtra already has one of the highest taxes on petroleum products in the country. Diesel and petrol that attract 25 and 27 per cent of sales tax respectively and with the hike prices, state government is going to get additional 75 paisa per litre of sales tax from diesel and Rs 1.35 per litre from petrol. And state government has no right to collect this additional tax from people as they have nothing to do with the losses of petroleum companies.