By Venkatachari Jagannathan Chennai, Nov 28 : .The BJP in Tamil Nadu has taken a hostile stance against the Chief Minister M.
K.Stalin.
After the Central government reduced excise duty on petrol and diesel by Rs 10/litre, the party staged a bullock-cart protest against the refusal of the state government to lower its value added tax (VAT).
Curiously, it is possible to say that Atal Bihari Vajpayee, former Prime Minister and leader of BJP was the first to ride a bullock cart in protest against high fuel prices.
He rode a bullock cart to the Parliament in 1973 when petrol prices were increased by seven paise.
Since then, many parties have used this protest tactic including the Congress in Karnataka, and the BJP Tamil Nadu.
If automobile engine power is measured by horse power, then the protest against fuel price rise should be measured in bull power
Be that as it might, the Tamil Nadu BJP has been taking on DMK government under its new President K.Annamalai on various issues.The latest is against the decision to reduce VAT on autofuel prices.
Opposition parties in the state such as the AIADMK, BJP and its allies, have been citing DMK’s promise to reduce petrol price by Rs 5/litre and diesel price by Rs 4/litre.However, it has failed to do so.
DMK and its allies were in opposition to the Central government’s fuel price rises.
There were many memes that used to be posted on social media voicing disapproval of the BJP-led Central government regarding fuel prices.
Curiously, all these memes stopped after the Central government reduced the excise duty for petrol and diesel and the refusal of the state government to reduce VAT.
Palanivel Thiaga Rajan, Tamil Nadu Finance Minister, has categorically rejected any reduction in state taxes on these fuels until the Union government returns its taxes to 2014.
Rajan stated that a reduction in tax rates would result in a decrease of about Rs 1,050 crore in state revenue.
He also reminded that the Tamil Nadu government’s reduction of petrol at Rs 3/litre on August 13, 2021 would result in a loss of revenue of Rs 1,160 crore annually
Rajan says that because of the high taxes imposed by the Central government, it is not fair or feasible for the state to reduce its taxes.
“I reiterate that the Union government should reduce the levy on petrol and diesel taxes to the 2014 rates.
This is the only fair and simple way to improve the situation.Rajan stated that such a move would automatically reduce the state’s taxation, as almost all states follow an ad-valorem system.
Over the past seven years, the Union government has increased the levy on petrol and diesel.
Rajan stated that the basic petrol and diesel prices and global import prices were the same as the current rupee import prices on August 1, 2014.
The basic price for petrol was Rs 48.55 per Liter and diesel was Rs 47.27 per Liter.
On November 4, 2021 the base price of petrol was Rs 48.36 per Liter and diesel was Rs 49.69 Per Liter.
The central taxes were Rs 9.48 per gallon for petrol and Rs 3.57 per gallon for diesel on August 1, 2014.Rajan stated that the Tamil Nadu government’s taxes at that time were Rs 15.47 per gallon on petrol and Rs 10.23 for diesel.
Rajan stated that Tamil Nadu levies ad valorem taxes after Union taxes.This move by the Union will cause a further reduction in petrol pump prices by Rs 0.65 (total Rs 5.65) and diesel by Rs 1.10 in Tamil Nadu.It will also result in a loss in revenue of around Rs 1,050 crore annually.
Rajan earlier stated that it was possible to bring petrol and diesel under the Goods and Services Tax regime (GST), provided that the Central government removes the surcharge and cess.
The PMK has also demanded that the Central government reduce taxes in line with the fall of crude oil prices on international markets.
J.Jayalalithaa, the late Chief Minister of AIADMK, was a strong advocate for the Central government changing fuel pricing.
Jayalalithaa argued that fuel rates should be determined on the basis of import costs and refining fees and domestic crude oil rates and the refining costs for the same, rather than on the Trade Parity Price.
(Venkatachari Jagannathan can be contacted at [email protected])
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