Kerala govt not to reduce tax on fuel: Finance minister

Thiruvananthapuram, Nov 5 (IANS) Kerala finance minister K.N. Balagopal has said that the state would not reduce its share of tax on petrol and diesel. Addressing media persons he said that there is a proportionate reduction in the state's share on tax.

Balagopal said, "When the Centre reduced its tax by Rs 10 per litre for diesel and Rs 5 per litre for petrol, the reduction in price was Rs 12.30 per litre for diesel and Rs 6.56 per litre for petrol. This means that the additional Rs 2.30 reduction for diesel per litre and Rs 1.56 per litre for petrol was the state's share."

He said that the state government will have to forgo Rs 500 crore this fiscal year and Rs 1000 crore next fiscal year with petrol and diesel prices going down by Rs 1.56 per litre on petrol and 2.30 per litre for diesel.

He said that the reduction on the tax rate announced by other states was a rollback of the hike they had affected earlier.

Balagopal came down heavily on the Congress and said that the previous UDF government led by Oommen Chandy had increased the state's share on petrol and diesel thirteen times.

He said that the LDF government has not increased its rate of tax on fuel since the past six years. The Centre was collecting more money than the state's share of tax by imposing a huge surcharge, he added.

He said that while the Centre collected Rs 27.9 from petrol per litre and Rs 21.8 per litre from diesel as surcharge, the state was collecting only Rs 22.9 and 21.8 per litre as its share of tax.

Balagopal said that the Centre was misusing a constitutional provision of allowing it to collect a small surcharge for use during exigencies but the Centre was charging an exorbitant amount. He added that collecting surcharge without sharing a portion with the state government was infringement on the rights of the state.

He said that this was against the federal principles and that the state governments would soon raise this as a major issue.