Entire annual Rs 2.2 lakh crore burden of fuel tax cuts to be borne by Centre: Finance minister Sitharaman – Times of India

NEW DELHI: A day after asserting a hefty gasoline tax lower, Union finance minister Nirmala Sitharaman on Sunday stated the 2 rounds of responsibility reductions—the final one being in November—will price the exchequer Rs 2.2 lakh crore yearly and the states’ share from the tax pool is not going to be affected because the Centre had opted to chop cess on petrol and diesel, that are exterior the divisible pool.
The non-BJP-governed states, nonetheless, held out towards matching the Centre’s transfer by reducing VAT. Most of them argued that since VAT is normally charged as a proportion of the worth (advert valorem) after including central levies and different prices, the sharp discount in excise responsibility has robotically introduced down the tax in most states.
Solely Bihar, the place BJP is a companion within the authorities, has held out hope of a discount in VAT, with chief minister Nitish Kumar saying he’ll focus on the problem with coalition members. In Karnataka, CM Basavaraj Bommai stated the federal government will think about an extra discount, whereas Odisha is anticipated to determine within the subsequent few days.
Sitharaman’s feedback got here following the opposition’s “criticism” or “appraisal” of the choice introduced on Saturday aimed toward blunting a number of the impression of the Russia-Ukraine battle on Indian households grappling with larger meals and fuel costs. The Centre on Saturday lower tax by Rs 8 on a litre of petrol and Rs 6 on diesel. On November 4, excise responsibility was lower by Rs 5 on petrol and Rs 10 on diesel.

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