Kerala’s Marxist Finance Minister TM Thomas Isaac on Thursday rejected the Central Government’s proposal that States should consider slashing the VAT on petroleum products in accordance with the step it had taken the other day by cutting the excise duty on fuels in order to alleviate the burden on the people.
“We are not planning to cut fuel taxes. let the Centre cut the duty it has imposed on petroleum products first. We can think about it after that. The Centre should take a policy decision on the matter,” said Isaac, who had in September itself made it clear that Kerala had no plans to cut fuel taxes.
The question of slashing fuel taxes did not arise at this juncture as the State was not in a comfortable financial situation and as it was considering the option of borrowing money, the Minister said. “We can’t cut taxes in the context of the GST burden. Kerala’s GST share is Rs 1,200 crore whereas we would have got Rs 1,600 crore from VAT,” he said.
Refusing to consider the slashing of excise duty by the Centre as a sincere step, Isaac said, “They hiked the excise duty by Rs 14 and then bring in a Rs 2 slash. What does it meanIJ” A situation where the people were forced to pay more money in tax than the price of the fuel is the result of the inefficiency of the Centre, he alleged.
“Fuel prices were hiked in the past on the basis of the high crude prices. But when the crude prices fell like anything, they didn’t lower the fuel prices,” Isaac pointed out. Kerala had earlier lowered the tax on aviation fuel but that had not reflected in the air fares, he said adding, “What is needed is a policy decision from the Centre. let them take it first.”
Meanwhile, former chief minister Oommen Chandy asked both the Centre and the State Government to slash taxes on fuels. He pointed out that the Centre had slashed fuel taxes when the UPA was in power and the former Congress-led UDF Government in the State had cut fuel taxes six times giving a benefit of Rs 620 crore to the people.