BENGALURU: It has been a month since the state government cut taxes on fuels, which Chief Minister Basavaraj Bommai had said would lead to a revenue loss of Rs 2,000 crore to the state exchequer. However, the cut in fuel prices has led to nearly a 10-fold increase in the sales of petrol and diesel, minimising losses to the state.
In November, revenues from fuel sales were up by approximately Rs 200 crore. “The consumption and sales tax collection of oil companies is also more as compared to last year,” Commercial Taxes Commissioner C Shikha told TNIE.
On November 4, soon after the government announced the cuts, she had said that the revenue loss would be made up with the increase in consumption which has come true. Karnataka had reduced the taxes and levies by about Rs 7 per litre of petrol and diesel, while the Centre had effected a cut of around Rs 5.
BT Manohar, Chairman, state GST committee, said, “With the fuel rate cut, the consumption has increased. This has resulted in an increase in revenues from fuel sales.” Despite heavy rain and inclement weather, the fuel sales were up in November. The consumption will only go up over the next few months with the weather expected to ease up, sources said.
‘Rs 5-6/L price diff in K’taka’
Sources from the oil industry said, “Karnataka enjoys a price difference of at least Rs 5-6 per litre as compared to neighbouring states of Maharashtra, Tamil Nadu, Telangana, Andhra Pradesh and Kerala, which makes a big difference for the transport sector. With this, the sale of diesel has shot up at bunks along the border, while the petrol sales have not seen such a big jump.”