No sales tax cut on petro products in Bihar: Modi | india | Hindustan Times
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No sales tax cut on petro products in Bihar: Modi

Modi said that Centre's appeal to the states to reduce tax on petro products to ease consumers' burden lacked an indepth understanding of the existing tax structure.

india Updated: Jun 13, 2006 18:02 IST

Ruling out reduction in sales tax on petroleum products as suggested by the Centre, the Bihar government on Tuesday suggested that Prime Minister Manmohan Singh hold a meeting of Chief Ministers of all the states to bring about uniformity in the tax structure on petroleum products.

It is impossible for Bihar to further slash tax on petroleum products, which is the lowest in the country, Deputy Chief Minister Sushil Kumar Modi said.

Modi was part of an eight-member delegation, which included Assam Chief Minister Tarun Gogoi, that visited Europe to study the mechanisms adopted there to implement the value-added taxes.

He said that Union Petroleum Minister's appeal to the states to reduce tax on petroleum products to ease the burden on consumers lacked an indepth understanding of the existing tax structure in all the states.

He said while the NDA government had already reduced the tax on petrol and diesel from 22 per cent to 20 per cent effective from April 1, 2006 in Bihar, the tax structure in non-NDA, non-BJP-ruled states was on the higher side.

In Maharshtra, there was a confrontation between the Congress and Nationalist Congress Party (NCP) on fixation of sales tax. The state government had reduced the tax on petroleum products by one per cent from 30 per cent, while levying one rupee cess per litre, he said.

Similarly the Congress government in Andhra Pradesh had just reduced the tax merely from 23 per cent to 22.25 per cent.