Diesel tax cut in store
Oil ministry to ask states to rationalise tax on diesel
New Delhi: Petroleum ministry has called a meeting of states to persuade them to rationalise duties on diesel, which could bring down its prices.
Also, a committee of secretaries has approved a rejig of natural gas allocation policy, giving city gas distribution top priority for allocation of domestically produced fuel, which will ensure that PNG and CNG prices to some extent are not influenced by international prices.
The state taxes on diesel varies from 25 percent by Chattisgarh and Gujarat, 22 per cent by Andhra to 9 per cent by Haryana. Due to this diesel prices vary across states from Rs 57.84 a litre in Delhi to Rs 66.01 per litre in Mumbai.
The meeting has been called with the 12 states which have the highest local taxes on diesel. The petroleum ministry wants to impress upon these states on the need for a uniform taxation policy and doing away with state specific multiple levies.
Petroleum ministry on July 9 wrote to the state governments on the issue of high local taxes on fuel.
The meeting has been called with officials from six states of Assam, Bihar, Haryana, Karnataka, Uttarakhand and Kerala on July 30 and 31.
A meeting with officials from Maharashtra, Madhya Pradesh, Rajasthan, Tamil Nadu, West Bengal and Uttar Pradesh has been scheduled for August 5-6.
During the previous UPA regime, former petroleum minister Murli Deora had actively lobbied with the state governments to cut down taxes on petrol and diesel to give relief to consumers.
Mr Deora had written to all the CMs to look into the matter and bring down the incidences of the state taxes, so as to provide relief to the consumers. However, states didn’t reacted positively to Mr Deora advise. He had also failed to persuade the states to switch over to specific rates for value added tax on petrol and diesel instead of the advalorem (percentage) structure.
The Committee of Secretaries decision to change natural gas allocation policy will be now to be approved by CCEA. City gas distribution projects are ranked fourth in the priority list.