Wary Bengal slashes sales tax | kolkata | Hindustan Times
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Wary Bengal slashes sales tax

kolkata Updated: Jun 05, 2008 02:09 IST
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Quick to dissociate itself from an unpopular decision, the Left set in motion two events on Wednesday: a 12-hour bandh in Bengal to protest the oil price hike, and sales tax relief on petroleum products.

The state government reduced the rate of sales tax on petrol from 25 per cent to 20 per cent and on diesel from 17 per cent to 12.5 per cent. This would lower the higher retail price of petrol and diesel by Rs 2.12 and Rs 1.38 respectively, Finance Minister Asim Dasgupta said after a meeting with Chief Minister Buddhadeb Bhattacharjee.

Sources said the government was forced to implement such a move following its poor showing in the panchayat elections. “Besides, Lok Sabha elections are scheduled for next year. We need to build the people’s confidence. So, we are doing as much as possible,” a government official said.

Dasgupta said the state, with its “limited financial power”, had decided to reduce sales tax rates on petrol and diesel and urged the Centre to reconsider the price hike. “With this reduction, the state will incur a revenue loss of at least Rs 500 crore,” he said. The minister said sales tax on LPG had earlier been reduced from 12.5 per cent to 4 per cent, and was not taken into consideration this time. “There is no scope of reduction of LPG this time,” he said.

Blaming the Centre, Dasgupta said: “We have the potential to stop import of petroleum products. But it was never explored.” He also claimed the government has enough foreign exchange to buy petroleum products. “But I can’t understand why they are mopping up Indian rupees for rise in petrol prices.”

After the hike was announced in Delhi, the state CPI-M wasted no time announcing a general strike on Thursday. The Trinamool Congress announced one on Friday. Left Front chairman Biman Bose said, “This is the ultimate form of protest against the UPA government’s failure to control the cascading effects of inflation and price rise.”