labels: Oil & gas
Four states announce fuel tax cuts news
05 June 2008

Mumbai: West Bengal, Bihar, Tamil Nadu and Kerala have announced a reduction in sales tax rates to reduce the impact of a hike in the prices of petrol, diesel and liquified petroleum gas announced by the centre last night.

The Maharashtra government has also indicated a likely cut in sales tax on fuels.

The West Bengal government has cut sales tax on auto fuels by about 5 per cent, which it said would cause a revenue loss of  Rs500 crore to the state.

Sales tax ion petrol will be reduced to 20 per cent from 25 per cent, and sales tax on diesel to 12.5 per cent from 17 per cent.

The benefit to consumers will range between Rs1.4 to Rs2.1 a litre, the government said in a statement.

In Bihar, the sales tax on diesel has been cut by 1.64 percentage points to 18.36 per cent and on petrol by 2.5 percentage points to 24.5 per cent, nearly negating the fuel price hike.

Kerala has also agreed in-principle to cut sales tax, but is expected to announce the change next week, a government official said.

The centre raised petrol and diesel prices by about 10 per cent yesterday, its biggest increase in 12 years, as pressure of near-record high crude prices forced the government to cut back the mounting subsidy bill.

Auto fuels in India are taxed in different states at varying rates, ranging from 10 per cent to 30 per cent.

The steep hike in petrol and diesel prices has made the precious fuel dearer in Bangalore, the country's IT hub, with retail prices being the costliest in the country.

Heavy taxes levied by central and state governments have led the state-run oil marketing firms to increase the price of petrol in Bangalore by Rs5.61 per litre to Rs58.50 from Rs52.89 and diesel by Rs3.36 per litre to Rs39.80 from Rs36.44.

In contrast, post-hike a litre of petrol costs Rs50.56 in New Delhi, Rs55.88 in Mumbai, Rs54.29 in Kolkata and Rs55.07 in Chennai.

Similarly, diesel is cheaper in New Delhi at Rs34.80 a litre, Rs39.54 in Mumbai, Rs37.17 in Kolkata and Rs37.73 in Chennai.


 search domain-b
  go
 
Four states announce fuel tax cuts