‘If the Centre were to reduce the taxes to 2014 rates, the state tax - levied ad valorem will automatically reduce’

Ruling out any reduction in State tax on petrol and diesel, Tamil Nadu Finance Minister Palanivel Thiaga Rajan reiterated that the ‘sole, simple, and fair approach’ to improve the situation for all is for the Union Government to reduce the levy of taxes on petrol and diesel to the rates prevailing in 2014.

Such a move will automatically reduce States’ tax (as almost all States follow ad-valorem taxation), he said. The Union Government’s taxes continue to be exorbitant. It is neither fair nor feasible for the State Government to further reduce taxes.

‘If the Centre were to reduce the taxes to 2014 rates, the state tax - levied ad valorem will automatically reduce’

Ruling out any reduction in State tax on petrol and diesel, Tamil Nadu Finance Minister Palanivel Thiaga Rajan reiterated that the ‘sole, simple, and fair approach’ to improve the situation for all is for the Union Government to reduce the levy of taxes on petrol and diesel to the rates prevailing in 2014.

Such a move will automatically reduce States’ tax (as almost all States follow ad-valorem taxation), he said. The Union Government’s taxes continue to be exorbitant. It is neither fair nor feasible for the State Government to further reduce taxes.

The Centre has repeatedly increased the tax on petrol and diesel over the last 7 years. If it were to reduce the taxes to 2014 rates, the state tax - levied as an ad valorem tax on the sum of basic price and Union government levy - will automatically reduce as well.

Media: Business Line