The BJP-led government has decided to roll back a proposed tax hike on diesel in the state following stiff opposition by petroleum dealers, transporters and business bodies, officials said on Friday.
The roll back comes even before government could notify the September 15 cabinet decision on modified VAT regime on petroleum products. The hike on petrol, however, would continue.
The government’s decision was notified through an official note by the chief minister’s secretariat on Thursday.
“The chief minister, honouring popular feeling, has decided to withdraw the cabinet decision on diesel taxation. The decision on petrol taxation, however, would be taken after comparative study of petrol prices in neighbouring states,” the official note said.
The state cabinet had approved a conditional tax regime on petroleum products, a fixed VAT of Rs 12.50 on per litre sale of diesel and Rs 15.40 on petrol.
The petroleum dealers were supposed to pay the fixed VAT or uniform 22% VAT on both the commodities which ever was higher. The cabinet had also decided to levy 1% cess on the product before tax.
The move would have shot up diesel prices by Rs 4.21 in the state and that of petrol by Rs 4.54.
The petroleum dealers association which had led the protest against new VAT regime welcomed the roll back on diesel.
Ashok Kumar Singh, president of the association said petrol prices too need to be curtailed. A delegation of the association on Friday met commercial taxes secretary Nidhi Khare and the chief minister.
Political parties -- the Congress, the JMM and the JVM-P -- however have taken the government to task over not lowering fixed VAT rate on petrol and have threatened to take the issue to the people’s court.
“The government lacks maturity as well as direction. It takes decisions without giving them a thought only to withdraw them later. By not making cut in petrol prices, which is used by commoners shows the true anti-people character of the government,” said Sukhdeo Bhagat, the state Congress president. JMM central committee member Vinod Pandey too said that the “government moves ahead only to step back. It lacks acumen to rule and administer.”