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No cuts till oil price break-up: States

New Delhi, June 15: The empowered committee of state finance ministers headed by Bengal’s Asim Dasgupta today put the ball back in the Centre’s court over scaling down taxes on petrol and diesel.

The committee has unanimously decided to ask the petroleum ministry to give it a detailed break-up of how the price of petrol and diesel has been fixed during the past three years.

Dasgupta said after the meeting that the committee had decided there could be no discussion on states cutting sales tax on petrol and diesel until the petroleum ministry explained how the prices had been arrived at.

The committee also expressed its displeasure over the way the Centre had forced states to reduce sales tax on LPG recently, from 12.5 per cent to 4 per cent, by according it “declared good status”.

Dasgupta said the panel wanted to know by how much the revenue of the Union government had been going up following successive oil price increases. It should also be told “how far the government of India could go to cut central excise duty on petrol and diesel in the present situation”.

“Only when the answers to these questions are made available to the committee, would it be able to take up the issue of petroleum minister Murli Deora’s letter asking the chief ministers of all the states to reduce the sales tax on petrol and diesel,” he said.

The decision had been taken unanimously by all the states cutting across party lines, the Bengal minister said.

He pointed out that the finance ministers of Congress-ruled Punjab, Haryana, Delhi and Uttaranchal were present at the meeting. BJP-ruled Rajasthan, Samajwadi Party-ruled Uttar Pradesh and Janata Dal (U)-ruled Bihar were also represented.

The empowered committee has placed on record that in future the Centre should not force the states to take a step that will reduce their revenue. The states must be consulted and the decision implemented only with their consent, he added, referring to the LPG tax cut. Sources said Bengal had lost Rs 120 crore as a result of the cut.

States get a fourth of the taxes collected by the Centre under the heads of corporate and income tax and customs and excise duties, Dasgupta said, adding this was not adequate.

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