NEW DELHI: Senior Congress chief P Chidambaram on Sunday questioned whether or not the states can afford to surrender income from VAT on petrol and diesel until the Centre devolves extra funds or offers them extra grants, likening their scenario to being between “the devil and the deep sea”.
The former finance minister’s remarks come a day after the federal government introduced Rs 8 per litre reduce in excise responsibility on petrol and Rs 6 discount on diesel.
“The notification on reduction of duty on Petrol and Diesel is now available. FM used the words ‘Excise Duty’, but the reduction is in Additional Excise Duty which is not shared with the states. Hence, contrary to what I said yesterday, the entire burden of the reduction falls on the Centre. To that extent, I stand corrected,” Chidambaram mentioned.
The states are getting little or no by means of share of duties on petrol and diesel, he mentioned, noting that their income is from VAT on petrol and diesel.
“I wonder if they can afford to give up that revenue unless the Centre devolved more funds or gave them more grants,” Chidambaram mentioned. The scenario is like being between “the devil and the deep sea”, he mentioned in a collection of tweets.
Petrol value on Sunday was slashed by Rs 8.69 a litre and that of diesel by Rs 7.05 per litre following the federal government’s determination to chop excise responsibility on auto fuels, giving aid to customers battered by excessive gasoline costs that had pushed inflation to a file excessive.