THIRUVANANTHAPURAM: The prices of petrol and diesel in Kerala will come down by `10.41 and `8.36 in Kerala, as per preliminary calculations. Finance Minister KN Balagopal claimed that Kerala too slashed the tax by Rs 2.41 and Rs 1.36 on petrol and diesel respectively. But, the minister’s claim is misleading since the drop in sales tax revenue was a reflection of the cut made by the Centre.
There is no change in the percentage of sales tax levied by Kerala - 30.08 pc on petrol and 22.76 pc on diesel. “Kerala government welcomes the Central government’s partial cut after a huge increase in the petrol/diesel tax. The state will reduce the tax on petrol by Rs 2.41 and diesel by Rs 1.36,” he said in a statement issued after the Centre’s announcement. The minister’s statement in haste is viewed as an attempt to escape from people’s ire in the backdrop of the Thrikkakara byelection.
The Kerala General Sales Tax (KGST) levied on petrol and diesel on a fixed percentage basis in addition to a cess of Rs 1. If the government has to claim that it reduced the tax then it should have reduced the percentage. The present reduction is only a reflection of the cut made in the value on which tax is levied. Balagopal told TNIE that the state decided to forgo its revenue in line with the Centre’s move. He said his government did not increase the tax rate to make up for the loss as done by the previous UDF government over a dozen times.