The Telegraph
Since 1st March, 1999
Email This Page
Bengal looks afresh at levy

Calcutta, Dec. 7: The Bengal government, which charges the highest sales tax on petrol and diesel in eastern India, is exploring options to reduce the levy.

The exercise to bring down the fuel price ' an issue that has given an excuse to call three bandhs in 17 days in the state ' hinges on two factors. The Buddhadeb Bhattacharjee government hopes to convince the Union government to trim central taxes and other states in the east to agree to parity of rates.

'We are exploring all possibilities to provide some relief to the people. We are in constant touch with Delhi and holding discussions among ourselves to find a way out,' revenue secretary Debashis Sen said.

Other officials said finance minister Asim Dasgupta has initiated talks with other state governments in the region to bring uniformity in petroleum product prices. A meeting of finance ministers of the region is expected by the year-end.

'It is true that the rates of sales tax on petrol and diesel in Bengal is a little higher than in other states in the eastern region, Sen said. 'But it must be kept in mind the sales tax is a major revenue stream for the state and if we reduce sales tax on petrol and diesel, we will lose revenue. '

But the CPM, which has repeatedly asked the Centre to bring down prices and forced it to roll back the monthly hikes in cooking gas rates, is keen to address the fact that a state ruled by the party has the highest local tax in the region (see chart).

'Our government will not balk at reviewing the situation and reduce our portion of taxes. But they (Centre) will also have to slash the excise duties on petroleum products so that the consumers can get some relief,' a government official said.

The officials said the Bengal government wants to charge sales tax on diesel at 17 per cent, five per cent less than the prevailing rate. If the cut comes through, the price of diesel will fall by Re 1 per litre.

On petrol, too, it is keen to lower the tax by 5 per cent to maintain a uniform rate of around 22 per cent. This will translate into a Rs 2 reduction per litre.

The officials also felt that lower tax will help sell more fuel in the state, resulting in more income for the government. A large number of transporters, especially long-distance trucks and buses, now tank up in Jharkhand or Bihar as the cost is less there. As a result, the sale of diesel in Bengal is gradually decreasing.

Email This Page