- By Mallika Mehzabeen
- Fri, 13 Aug 2021 05:38 PM (IST)
- Source:JND
Chennai | Jagran News Desk: In a major relief for people, the Tamil Nadu government has decided to slash the petrol prices by Rs 3, state Finance Minister PT Palanivel Thiagarajan (PTR) announced during the maiden budget speech on Friday, August 3. Meanwhile, he also mentioned that the change took place under the direction of Tamil Nadu Chief Minister MK Stalin.
"I am happy to inform the House that this government has decided to reduce the effective rate of tax on petrol by Rs 3 per litre and thereby provide major relief to the toiling working class people in the state. This measure will result in a loss of revenue of Rs.1,160 crore a year," the Finance Minister said.
The prices of petrol, as well as diesel, have touched the sky across the country during the past few months with the petrol crossing the three-digit mark an diesel nearing Rs 100. Before the price cut, the price of petrol was Rs 102.49 per litre in Tamil Nadu and the price of diesel was at Rs 94.39 per litre.
The overall union levies on petrol were increased from Rs.10.39 per litre in May 2014 to Rs.32.90 per litre, now. Similarly, the levies on diesel were increased from Rs.3.57 in May 2014 to Rs.31.80. Even as the union government's cesses and surcharges were increased, the basic union excise duty was brought down sharply. Hence, in 2020-21 even as the revenue to the union government from petrol and diesel went up by 63 per cent from the revenue in 2019-20, the share of the states declined sharply, the Minister said.
Fuel prices depend on the state and central government taxes along with other charges such as import charges, port duty, freight charges, excise duty and the international price of crude oil per barrel. Value Added Tax (VAT) makes up the largest chunk of the increase in prices in most of the states.
A large portion of the tax is imposed by the Union government and state government spearately. Meanwhile, the price cut announced by Tamil Nadu government will be from the state government's tax and it will bear the cost of the reduction.
Back in the month of July, the Finance minister of Tamil Nadu said that it is impossible to cut down the VAT in the current scenario. He also mentioned that the Union government's taxes have taken a large portion of the cost, adding that the tax structure is unfair. Tamil Nadu has 2.63 crore two-wheelers, which has become the most popular mode of transport for the working poor and they feel the pinch of the rising cost of petrol.