Finance Minister P Chidambaram today urged states to share the subsidy burden on petroleum products with the Central government.
In 2011-12, the Centre collected Rs 95,349 crore by way of taxes on various petroleum products. Out of this, it shared Rs 15,778 crore with the states. That left the government’s tax collections from petroleum products at Rs 79,571 crore.
Besides getting their share of Rs 15,778 from the Union government, the states also levied Value Added Tax (VAT) and some other taxes on petroleum products taking their total collections to Rs 1,12,723 crore, against Rs 79,571 crore collected by the Centre.
“The Centre is paying huge subsidy on fuel. Therefore it is not unreasonable to expect that some part of the burden is borne by the state governments too,” Chidambaram told reporters.
He also welcomed the decision of certain states to provide subsidy on some LPG cylinders and urged all states to do the same. After the Centre capped the LPG cylinders per household to six in a year, some Congress-ruled states came forward to increased the cap to nine cylinders.
The finance minister clarified the government would not levy excise and customs duty even on unsubsidised cylinders.
An earlier notification of the government had said all subsidised cylinders would attract zero customs and excise duty. The notification will be amended to say all cylinders will attract zero duty.
Chidambaram also commended the Bihar government for lowering VAT on diesel from 18 per cent to 16 per cent today. The state government will forgo revenue of Rs 1.18 crore on account of this reduction.
States are levying VAT on diesel in the range of 9.08 per cent in Punjab to 25 per cent in Chhattisgarh. On petrol the range varies from 18.41 per cent in Meghalaya to 32.59 per cent in Punjab. Goa charging 0.1 per cent is an exception.
