Karnataka Congress slams Modi over call to reduce VAT

During the VC, Modi said that had Karnataka not reduced its tax on petrol and diesel, the state government would have earned additional revenue of ₹5,000 crore in the last six months.

Congress in Karnataka on Wednesday came down heavily on Prime Minister Narendra Modi for suggesting that some states bring down Value Added Tax (VAT) on petrol and diesel.

Giving an example of the petrol-diesel price, PM Modi said the Centre waived the duty last year to reduce the burden of the people and then urged all states to do the same so that the benefit can be transferred to the users. (Representative use)

“There is one word to describe @narendramodi’s words & actions. It’s ‘Hypocrisy’. Central excise duty on Diesel is now ₹21.84 & on Petrol is ₹27.91. This is an increase from ₹3.45 & ₹9.21 respectively since BJP came to power. Restore Excise Duty to pre-Modi times,” Siddaramaiah, the Leader of Opposition, on Wednesday said in a post on Twitter.

The statements come after the Prime Minister, during his video conference with chief ministers to take stock on Covid-19 across the country.

During the VC, Modi said that had Karnataka not reduced its tax on petrol and diesel, the state government would have earned additional revenue of ₹5,000 crore in the last six months.

Giving an example of the petrol-diesel price, PM Modi said the Centre waived the duty last year to reduce the burden of the people and then urged all states to do the same so that the benefit can be transferred to the users.

“Some states abided by, but some states did not. In these states, petrol, diesel are still dearer. This is, in a way, an injustice to the people of the state and also detrimental for the economy of other states,” PM Modi said, adding that states which have reduced the tax could have earned more money like “Maharashtra, Gujarat’s neighbour” by not reducing the burden.

Karnataka chief minister Basavaraj Bommai on Wednesday said that the government will assess the state economy and then take a decision.

Bommai on Wednesday was non-committal on any further cut in fuel tax, as he maintained that any decision in this regard will be taken after looking at the economy of the state.

“He (PM) gave an example. In November when the central government reduced excise duty, some states too reduced, it has benefited the people of the state and it is cooperative federalism. He said it will help if other states reduce tax as well, so that neighbouring states are not affected,” Bommai told reporters in response to a question.