States seek compensation for cut in sales tax on auto fuels

[K.Karthik Raja]

States seek compensation for cut in sales tax on auto fuels
Monday, Jun 16

NEW DELHI - State governments today asked the Centre to partially
compensate them for the projected revenue loss of around 80 bln rupees
due to cut in sales tax on petroleum products.
"The states together would lose 80 bln rupees in the remaining
months (of the current financial year) on account of cut in sales tax.
We want the Centre to compensate 50% of this (revenue loss),"
Empowered Group of State Finance Ministers Chairman Asim Dasgupta told
reporters after the panel's meeting
here today.
Ten state governments have reduced sales tax on petrol and 15
states have
cut sales tax on diesel to cushion the steep increase in auto fuel
prices
announced by the Centre earlier this month.
On Jun 4, the centre had raised prices of petrol by 5 rupees per L
and
diesel by 3 rupees per L. It also increased price of cooking gas by 50
rupees
per cylinder.

[K.Karthik Raja]

"The states have limited resources and cannot endlessly take
revenue hit,"
Dasgupta said.
He said the states have also sought from Centre details of policy
of price
fixation of petroleum products as their base price varies from one
state to
another.
On the issue of cut in sales tax on aviation turbine fuel,
Dasgupta said
the issue will be discussed in the next meeting.
"We have asked for some more data from the civil aviation ministry
and
after we get the information we will take it up," he said.
The Empowered Group of State Finance Ministers will meet again
between
Jun 21-23 in Srinagar.
Last week Civil Aviation Minister Praful Patel sought declared
goods status for aviation turbine fuel to bail out airlines facing
mounting
losses due to the steep increase in its prices.
In Delhi, a kL of ATF has increased to 66,226.66 rupees from
45495.82
rupees in January.
ATF comprises 40-45% of airlines' total operational cost. End
.