Kerala: Minister says state can't reduce VAT on fuel prices; cites economic crisis

Kerala Finance Minister KN Balagopal stated on Thursday that the state would not reduce Value-added Tax (VAT) on fuel. Balagopal while subjecting on the same reasoned that Kerala was witnessing a severe economic crisis and thus, the reduction on fuel VAT could not be considered. While criticising the Union government's decision to reduce excise duty on petrol and diesel by Rs 5 and Rs 10, respectively, State Minister Balagopal alleged that the said step was "a temporary measure to save face and throw dust in the eyes of the people." In Kerala, the petrol price was reduced by Rs 6.57 and diesel by Rs 12.33. 

In a major relief to Indian Nationals, the prices of petrol and diesel were reduced by Rs 5 and Rs 10, respectively, on November 4. After seven straight days of increase, fuel prices remained constant on Wednesday. This initiative by the PM Modi led government comes at a time when India would be celebrating the festivities of Diwali, wherein people have even gone to claim this step as a Diwali bonanza bestowed upon by the PM. 

Balagopal wants Centre to cut special tax and cess on fuel

In a released statement, Kerala Finance Minister KN Balagopal urged the Union Government to immediately decrease the Rs 30 additional levied charge on petrol and diesel in a bid to assist the common man.

In a released statement Balagopal said, "The Union government decided to reduce the excise duty on petrol and diesel by a small margin following strong protests from the people. This reduction has been made to temporarily save face in view of the rising public outcry across the country. This is actually a ploy to throw dust in the eyes of the people,"

Balagopal went on to add that the states were not receiving a share of the revenue collected via the additional tax which was being levied irrespective of the international price fluctuations of petroleum. He further said the Left government in Kerala has not increased the state tax on petrol and diesel for the last six years. In fact, the state tax was reduced once during this period, he added. 

Congress anguished over CPI-M; stages walkout

Agitation in the state of Kerala regarding fuel price hikes had witnessed a war-like situation when the state Congress on November 2 had staged a walkout from the Kerala Assembly. While charging the CPI-M of frequent fuel hikes, Congress termed the instance as 'state-sponsored tax terrorism' as they headed out in between the proceedings of the Assembly. 

Though the LDF government maintained that it was the Union government and not the state government which was responsible for the fuel price hike, the UDF members wanted it to forego the additional tax revenue generated on its sales.

(Image Credits - Facebook/PTI)