Two days after the Union government slashed excise duty on petrol and diesel, Kerala on Friday reiterated that it has no plan to cut sales tax considering the poor financial situation of the state.
Talking to newsmen in the state capital, state finance minister KN Balagopal said the government had introduced many welfare programmes during the peak of the pandemic and they will be affected if the tax on fuel was cut. He said the Centre was forced to take such a decision in the wake of setbacks the ruling Bharatiya Janata Party suffered in recent by-elections.
“There is no need to reduce tax in Kerala. When the Centre reduced ₹10 and ₹5 for diesel and petrol, it has actually been reduced by ₹12.30 and ₹6.56 in Kerala due to the tax structure. The value-based structure is formulated in the state like this,” he said.
“Centre did not do a big thing. After hiking the price for almost every day, it made a small reduction. In last seven years, it increased tax by over ₹31 but the reduction was only slight,” he said, adding states were not given the share of revenue collected through additional tax. He said the government’s sales tax collection was not in tune with the soaring government expenditure so it can’t take any risk now.