KOCHI: With the surge in prices of petroleum products making life difficult for people, the government is expected to decide on whether or not to forgo additional revenue to the exchequer from the rise in fuel prices at the next Cabinet meeting.
Finance Minister T M Thomas Isaac told Express the Cabinet will decide on the proposal that will recalibrate the taxes. “With the recalibration, we can expect a difference of Rs 3.4 for every Rs 10 hike in fuel prices,” he said. Simply put, if the Centre announces a Rs 10/litre hike, in Kerala the increase will be Rs 6.6 per litre.
The state government earned Rs 7,795 crore from fuel taxes in the 2017-18 financial year. Isaac reiterated the onus was on the Centre to make a real difference in fuel prices by reducing the Excise duty. “I expect cooperation from all political parties in leading a protest against the NDA Government to take a decision in reducing the duties,” he said.
As petrol and diesel prices continues to increase for the 15th day, Keralites are feeling the pinch, shelling out record money for a litre of fuel. A litre of petrol and diesel on Monday retailed at Rs 81.02 and Rs 76.63, respectively, in Kochi.
Former chairman of Public Expenditure Review Committee Mary George said the UDF Government had forgone excess revenue from fuel prices in 2011, which resulted in a Rs 616 crore loss to the exchequer. “I expect the LDF Government to do the same to reduce the burden on the layman. Kerala is heavily dependent on goods coming from outside and the higher fuel prices will result in inflation,” she said.
Apart from the rising crude oil prices in international markets, the taxes levied by the Centre and state governments have also contributed significantly to the overall retail fuel prices.
Starting with the Excise duty levied by the Centre on fuel, a hike from Rs 9.46 to Rs 21.48 was recorded in nearly four years of the NDA Government. On the other hand, the duty on diesel saw a fourfold hike to reach Rs 17.33 from Rs 2.56 per litre. The same had prevented the layman from enjoying the full benefits of lower crude oil prices in the past few years. Last week, Isaac had asked the Centre to give up the 300 per cent tax hike which was imposed since the BJP came to power. “Unless a powerful national protest movement is begun, the Centre will not roll back its tax hikes. As a prelude to such movement, states should consider capping petroleum tax revenue at the present level,” Isaac said in a tweet dated May 22. Jose Sebastian, faculty, Gulati Institute of Finance and Taxation, said it was the Centre which should absorb the rising costs by reducing the Excise duty.