Bommai non-committal on fuel tax cut, wants to see health of economy
BENGALURU: Chief Minister Basavaraj Bommai on Wednesday was non-committal on any further cut in fuel tax saying that any decision in this regard will be taken after looking at the status of the economy of the state.
“Let us see. We must see our economy also. Based on that, we will decide,” he told the media after attending his virtual meeting with Prime Minister Narendra Modi. Bommai said this as Modi on Wednesday flagging higher fuel prices in many opposition-ruled states, urged them to reduce VAT in “national interest”. The CM also said that Modi appreciated the steps taken by Karnataka in reducing taxes on fuel.
In November 2021, the Karnataka government had cut sales tax on petrol from 35 per cent to 25.9 per cent and on diesel from 24 per cent to 14.34 per cent, which resulted in petrol price reducing by Rs 13.30 per litre and diesel by Rs 19.47 per litre. “The PM gave Karnataka’s example.
In November 2021, when the Centre reduced excise duty on fuel, many states, including Karnataka, reduced tax on fuel. Decision to reduce tax on fuel benefited people in those states and if other states also take such a decision it will help people in those states,” Bommai said. When asked if Karnataka government will reduce tax on fuel as the price of a litre of petrol has touched Rs 112, Bommai reiterated that a decision will be taken after considering the health of the economy.
While CM did not commit to cutting fuel tax, sources in the State Government said that they already reduced the tax and as of now there is no proposal before to cut the taxes again. Many states have not reduced state tax on fuel.
On Wednesday, Modi cited the example of Karnataka and Gujarat, both ruled by the BJP, saying they have suffered revenue loss of nearly Rs 5,000 crore and Rs 3,500-4,000 crore respectively by reducing VAT.
