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Sales tax on diesel hiked by ₹2 per litre
The previous tax revision occurred in June 2024, when the sales tax on petrol was raised from 25.92% to 29.84%
The Karnataka government on Tuesday raised the sales tax rate on diesel from 18.4% to 21.17%, resulting in a ₹2 per litre price hike, effective April 1. With this revision, the price of diesel in Bengaluru rose from ₹89.02 to ₹91.02 per litre. The state government justified the move stating that, despite the increase, Karnataka continues to offer diesel at a lower rate than neighbouring states, where prices range from ₹91.07 in Maharashtra to ₹97.35 in Andhra Pradesh.
The government justified that increase as a necessary step to manage revenue shortfalls while maintaining competitive fuel pricing. A government order stated, “even after this increase, the revised sale price in the state will continue to be lower compared to the neighbouring states.”
The previous tax revision occurred in June 2024, when the sales tax on petrol was raised from 25.92% to 29.84% and on diesel from 14.3% to 18.4%, leading to price hikes of ₹3 per litre for petrol and ₹3.02 per litre for diesel.
Opposition leaders have strongly criticised the move, arguing that the increase in diesel prices will lead to a surge in transportation costs, ultimately affecting essential commodities such as milk, vegetables, and groceries. Bharatiya Janata Party (BJP )leader R. Ashoka lashed out at the government, stating, “the warning I gave during the Budget session—that Kannadigas are in for a tough year—has now come true word for word.” He accused chief minister Siddaramaiah of misleading the public by avoiding tax hikes in the Budget and later imposing additional levies on essential goods.
“First, they increased milk prices, then imposed a cess on garbage collection, and now, without any prior notice, they have hiked diesel prices by ₹2 per litre,” Ashoka said. “The so-called economic expert Siddaramaiah should know that diesel is the backbone of goods transportation.”
The BJP further warned that the price hike would likely trigger an increase in bus fares, putting additional pressure on daily commuters. With fuel prices already a contentious issue, the opposition has vowed to continue its protests against what they describe as “anti-people policies” of the Congress-led state government
Additional chief secretary to the chief minister, L.K. Atheeq, defended the government’s revision, stating that the additional revenue from the diesel tax hike is projected to bring in approximately ₹2,000 crore for the state. He also clarified that there are currently no discussions about increasing the sales tax on petrol. “Despite this adjustment, Karnataka still has the most affordable diesel rates in South India,” he said.
