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Fuel ball in states’ court

As much as 60% of the retail price of petrol, which has crossed the Rs 100-mark in several cities, is made up of central and state taxes
Nirmala Sitharaman in Chennai on Saturday.
Nirmala Sitharaman in Chennai on Saturday.
PTI

R. Suryamurthy   |   New Delhi   |   Published 21.02.21, 02:15 AM

The steep fuel price hike has become a political hot potato with finance minister Nirmala Sitharaman deftly trying to share the onus of bringing down the rates with the states.

“It’s a vexatious issue in which no answer except for a fall in fuel price will convince anyone. Both the Centre and the states should talk to bring down the retail fuel price to a reasonable level,” she told reporters in Chennai.

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As much as 60 per cent of the retail price of petrol, which has crossed the Rs 100-mark in several cities, is made up of central and state taxes. “I can do that (cut taxes) if I have a certain guarantee that my revenue foregone will not be an opportunity for somebody else to get into this space and gain that... It is a maha bhayankar dharma sankatam,” she said.

“If all of us are talking about consumer prices of fuel and the tax raised by the Centre, the tax raised by the states is not holier than one another.” The taxes by the Centre and states are equal, she said.

On bringing petrol and diesel under GST, she said:   “There can be just one tax that can be shared by the Centre and the states rather than the states having their own and the Centre having its own.”

This would further usurp states’ revenue and increase their dependence on the Centre, analysts said.

Message to India Inc

In a separate event, Sitharaman asked India Inc to unleash its animal spirits to put the economy on a sustainable path of recovery and urged credit rating agencies to grade the economies in a relative sense and not in silos.



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