Chief minister Prithviraj Chavan has ruled out any cut in value added tax on diesel in the near future. “As of now, we are not considering any tax cut.
Whatever is done will be in the interest of the state, which needs revenue to meet severe drought,” the chief minister said.
On Friday, those who went to petrol pumps mentally prepared to fork out Rs5 extra for every litre of diesel were in for more bad news. The actual increase turned out to be Rs6.2 per litre. “In the morning, oil company representatives asked us to add 24% sales tax levied by state government, which works out to around Rs1.2 per litre,” said Ravi Shinde, secretary of the Confederation of Indian Petroleum Dealers.
Though the transport industry has requested the state government to cut VAT, the state is waiting for the Centre to appeal to states to cut the tax. In May, the state government was under pressure to cut tax on petrol but it did not do so. However, in July, it cut taxes by 2% on diesel and kerosene.
Transporters claim the diesel price hike will hit the industry hard. Bombay Goods Transport Association, a prominent transporter body, said the hike will further escalate transportation costs and lead to all-round inflation. Stating that the price of diesel in state is more than it is anywhere else in the country, the BGTA requested the state to “drastically reduce” taxes. “In Maharashtra, there is 20% sales tax on imported liquor and 24% on diesel. Is diesel less useful for common man than liquor,” asked Sunil Kale, president of the BGTA.
However, industry sources said they were expecting a rollback as there is immense pressure on the government from all sections. Transporter unions therefore have decided to wait and watch the developments before taking any major protest measures.
The CM said shortage of gas was a major constraint in connecting more people in the city through the piped natural gas (PNG) network.
“Even our gas-based projects in Dabhol and Uran have been facing gas shortage for long,” Chavan said.