Senior Congress leader P Chidambaram has questioned the central government regarding the reduction in VAT on petrol and diesel prices. He said that unless the Center gives more funds or grants to the states, can the states take the risk of giving up revenue from VAT on petrol and diesel? He said that for the states, this situation is like a ‘well on one side and a ditch on one side’.
He wrote in his tweet, “In two months increase by Rs 10 per liter and cut by Rs 9.50 per liter on petrol and Rs 7 per liter on diesel. It equals robbing more and paying less later!” At the same time, in another tweet, the former Finance Minister wrote that the Finance Minister’s call to the states is in vain.
Regarding the Finance Minister, he said, “When she deducts Re 1 in Central Excise Duty, then 41 paise of that rupee belongs to the states, that means the Center has deducted 59 paise and the states 41 paise. So don’t point a finger.” “The real cut will be when the Center cuts the cess on petrol and diesel (which is not shared with the states),” P Chidambaram said.
The Congress leader said that the states are getting very less share of excise duty on petrol and diesel. They get revenue on petrol and diesel through VAT. In such a situation, unless the states are given more funds from the center, will the states be able to cut the revenue? He said that this situation is like a ‘well on one side and a ditch on one side’ for the states.
Significantly, to rein in the prices of petrol and diesel, on 22 May, Union Finance Minister Nirmala Sitharaman announced that the excise duty on petrol was cut by Rs 8 per liter and on diesel by Rs 6 per liter. In such a situation, there will be a cut of Rs 9.50 on petrol and Rs 7 on diesel.