The Central Government on Saturday (May 21, 2022) cut the excise duties on petrol and diesel by ₹9.5 per litre and ₹7 per litre respectively.
“We are reducing the Central excise duty on Petrol by Rs 8 per litre and on Diesel by Rs 6 per litre. This will reduce the price of petrol by Rs 9.5 per litre and of Diesel by Rs 7 per litre,” the Finance Minister said.
This move is said to have revenue implication of around ₹1 lakh crore per year for the government, the Union Finance Minister said.
The Centre will also provide subsidy on LPG cylinders – ₹200 per cylinder – to around 9 crore beneficiaries of the Pradhan Mantri Ujjwala Yojana scheme, subject to a maximum of 12 cylinders per year.
Finance Minister Nirmala Sitharaman also urged the states to reduce the taxes on fuel to ease the burden on common man.
Following this, a number of states including BJP and non-BJP ruled states have reduced the taxes.
Congress-rule Rajasthan, Communist-ruled Kerala and Biju Janata Dal ruled-Odisha have cut State taxes on petrol and diesel.
However, the DMK government in Tamil Nadu has refused to oblige to Centre’s request.
In a lengthy statement running to 3 pages, Tamil Nadu Finance Minister Palanivel Thiagarajan said that it was ‘neither fair nor reasonable to expect States to reduce their taxes’, indicating that the DMK government will not cut the taxes on fuel.
Palanivel Thiagarajan took to comparing present fuel prices with that of 2014 stating that the Union Government ‘egregriously increased taxes from 2014 to 2021’.
“Though the revenue to the Union Government has increased manifold, there has not been a matching increased in the revenues to States. This is because the Union Government has increased the cess and surcharges on petrol and diesel while reducing the basic excise duty that is shareable with States”, he said in his statement.
He said that though the Union Government has reduced taxes now, it is still higher than the rate of 2014 by ₹10.14 per litre for petrol and ₹12.23 per litre for diesel.
It is pertinent to note that the DMK had promised to reduce petrol and diesel prices by ₹5 and ₹4 respectively.
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