THIRUVANANTHAPURAM: Chief Minister Pinarayi Vijayan has taken strong exception to Prime Minister Narendra Modi singling out a few states, including Kerala, that have not taken steps to reduce the sales tax on petroleum products. Modi reportedly made the remark while chairing a meeting of Chief Ministers on Wednesday to review the Covid situation in the country.
In a statement, Pinarayi said Modi's statement was unbecoming of an administrator who is well aware of the current economic condition of states that bear the huge burden of social welfare expenses.
"Attempts to pin the blame of price rise squarely on states, and not on the Centre which deals with financial management, is not befitting the federal system," the Chief Minister said. Asking the Centre to take urgent steps to arrest fuel price hike, the Chief Minister said the misery of the common man cannot be trivialised by unnecessarily blaming the states.
Pinarayi clarified that Kerala has never increased the sales tax on petroleum products for the past six years. While the Centre increased the tax on petroleum products 14 times from 2014, the state reduced its tax four times. "It needs to be remembered that the hike effected by the state is not on basic excise duty which is shared with the state," he said.
The Chief Minister pointed out that the excise duty on petrol was Rs 9.48 per litre in 2014. It rose to Rs 32.98 and was reduced to Rs 27.9. Excise duty on diesel which was Rs 3.56 per litre rose to Rs 31.83. This has now been reduced to Rs 21.8, he said.
Pinarayi said various surcharges and cess now constitute 15% of the total tax revenue of the Centre. As per Article 270 of the Constitution, surcharge and cess are not to be shared with the states. The taxes are being increased by the Centre in such a way that it does not fall under the tax share recommended by the Finance Commission, he said.
The Chief Minister said states that are reeling under Covid crisis, are being pushed into economic distress due to delay in disbursal of state share including GST compensation. "This goes against the concept of cooperative federalism," Pinarayi pointed out.