‘Will not reduce state tax on fuel,’ says Mamata days after Centre’s excise duty cut

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‘Will not reduce state tax on fuel,’ says Mamata days after Centre’s excise duty cut

Kolkata: Days after the National Democratic Alliance (NDA) government reduced central excise duty on petrol and diesel by ₹8 and ₹6 per litre respectively, West Bengal chief minister Mamata Banerjee on Monday said her government will not follow suit since it had reduced state tax on fuel by a rupee in 2021.

Bengal will suffer an annual loss of ₹461.45 crore in state tax because of the Centre’s decision, she said.

Hitting out at Bharatiya Janata Party (BJP) leaders for highlighting the reduction in local tax in states ruled by their party, Banerjee said Bengal reduced its tax on fuel in February 2021.

“With the Centre’s new announcement, Bengal’s share in tax on a litre of petrol has gone down by ₹2.80. Of this, ₹1.80 is because of reduction in Central tax and another rupee is due to the reduction in state tax which is in force since last year,” the CM said after a meeting of the state cabinet where the issue was discussed.

“By the same formula, our share in tax on diesel has gone down by ₹2.03 per litre,” she added.

“Our loss is higher than some of the opposition-ruled states. Kerala’s share in tax on petrol is down by ₹2.41, while Rajasthan and Maharashtra have suffered losses of ₹2.48 and ₹2.08 respectively,” said Banerjee.

“The BJP government has not reduced its cess by a penny since the entire amount goes to the Centre. The Centre collected ₹18,23,324 from tax on petroleum products in the first nine months of the last financial year. Nobody is saying a word on that. International price of crude oil came down after the Modi government came to power but retail price of petrol kept increasing, from ₹63.16 in May 2015 to ₹106.03 in May 2022,” Banerjee said.

The chief minister also mocked Union finance minister Nirmala Sitharaman’s decision to introduce a subsidy of ₹200 per 14.2 kg LPG cylinder for beneficiaries of the Pradhan Mantri Ujjwala Yojana. The cylinders will effectively cost around ₹800 since ₹200 will be transferred to bank accounts of the beneficiaries.

“How can poor people shell out ₹800 to buy cooking gas?” Banerjee said.

Bengal BJP’s chief spokesperson Samik Bhattacharya said Banerjee was making excuses instead of following the examples set by BJP-ruled states.

“She will not reduce state tax on petrol and diesel because it is her source of income,” said Bhattacharya.

In Kolkata, the price of petrol on Monday was ₹106.01 per litre while diesel sold for ₹92.74. Of the total taxes charged on prices of petrol and diesel in Bengal, the state’s share accounts for around 37%.