Tamil Nadu: Finance minister P T R Palanivel Thiaga Rajan rejects Centre's plea to cut tax on fuel

 

CHENNAI: Finance minister P.T.R PALANIVEL THIAGA RAJAN has rejected the Centre's appeal to states to reduce tax on petrol and diesel.

Noting that TN had reduced tax of 3 per litre on petrol in August, PTR said in a statement on Friday that it was neither fair nor feasible for the state government to further reduce taxes, when the Centre's taxes continue to be exorbitant.

He suggested that to improve the situation, the Centre should reduce the levy of taxes on petrol and diesel to the rates prevailing in 2014. Such a move will automatically reduce states' taxation, he said.

PTR recalled in the statement that the monetary policy committee of the RBI had urged the Centre to reduce taxes on petrol and diesel as a stimulus for economic growth. This demand was also put forth by several state governments. Subsequently, on November 3, the Centre announced a tax reduction of 5 per litre petrol and 10 per litre for diesel.

"Since Tamil Nadu levies "ad valorem" taxes (tax levied proportionate to the estimated value of the commodity) after Union taxes, this move by the Union government will cause an additional reduction in the pump price of petrol by 0.65 and diesel by 1.10 in TN," he said.

Media: Times of India