Monday, September 10, 2018

Bharat Bandh, But Punjab Did Not Cut the Highest Tax Price among all State in India

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Bharat Bandh, But Punjab Evades Tax Cut From Fuel Price
National Protest Against High Price of Fuel

Chandigarh, September 10, 2018:  Amid a nationwide protest led by the Congress against the high prices of fuel, the party’s government in Punjab finds itself unable to reduce the high taxes it charges on petrol and diesel. The state gets approximately Rs 27.85 as taxes on each litre of petrol (on Monday’s retail price of Rs 86.11-Rs 86.60 per litre) and Rs 10.41 per litre of diesel (from Rs 72.68 per litre that the consumer pays). The taxes include VAT, surcharge and 48 per cent excise duty on petrol that is returned by the Centre to the state.

National Protest Against High Price of Fuel

Punjab has among the highest rates of VAT on petrol in the country, second only to Maharashtra and Andhra Pradesh. Official sources said last year, VAT collection from petrol and diesel stood at Rs 5,833 crore. This year, it is likely to go up to Rs 6,000 crore. “Thus, it is a major source of revenue for Punjab. The state government has enough responsibilities to fulfil in sectors like social welfare, agriculture, policing, health and education from its limited resources.

There isn’t enough leg room to cut the taxes,” Finance Minister Manpreet Singh Badal said, adding that the government was keen on taking some burden off the backs of the common man. Punjab BJP chief Shwait Malik rued that the Congress was shedding crocodile tears on the issue, when it was itself unwilling to lower the taxes in the state.

PRICE (PER LITRE):             86.11(Petrol) ~ 72.68 (Diesel)
VAT & SURCHARGE:              22.39(35.6%) ~  10.41 (17.5%)
DEVOLUTION TO STATE:       5.46 —                None
TOTAL TAXES WITH STATE:  27.85              ~  10.41
CENTRAL TAXES:                     19.39              ~  15.33
TOTAL TAX ON CONSUMER: 47.24              ~  25.74

MAY FREEZE TAXES Sources say discussions are on to freeze taxes at current prices so there is no tax on any subsequent hike in fuel prices. A decision will be taken by the Cabinet. Government is also not charging social welfare security tax as announced in the Budget.

Gurmeet Monty Sehgal, spokesperson for the Petrol Pump Dealers Association, Punjab, too, said the state government should reduce its own taxes. “Punjab charges the highest tax in the region, which leads to people living in areas bordering Haryana, Chandigarh, Himachal Pradesh and Rajasthan getting their fuel from outside the state. Not only would lowering of taxes be a populist decision, it would increase the volume of the total sale,” he said. 

Countering this charge, Manpreet said the Union government had increased the excise duty by nine times in the past two years, besides setting aside a portion of this duty as special excise duty. “Of the Rs 19.39 per litre of petrol charged as excise duty by the Centre, they have set aside Rs 8 per litre as the special excise duty, thus giving lesser devolution of excise duty to states. The Centre should first slash the excise duty before throwing the responsibility on states to cut their taxes. The ideal situation would be to bring all fuels under the GST,” he said.

Source: The Tribune