Centre slams Maya for not lowering VAT on diesel,LPG
The Centre today slammed the Mayawati government in
Uttar Pradesh for not lowering Value Added Tax (VAT) on
petroleum products in the backdrop of recent hike in
fuel prices.
The central Empowered Group of Ministers(EGoM) had
recently raised the prices of diesel, kerosene and
domestic Liquified Petroleum Gas (LPG) following rising
international oil prices. Simultaneously, the Centre had
suggested the respective states to reduce VAT on
petroleum products to provide respite to common man.
“Two per cent reduction in VAT would not have lowered
the tax revenue of UP, but provided succour to people,” Union Coal Minister
Sriprakash Jaiswal told the media here. Justifying the latest round of fuel
price hike, he said that inflation had softened in recent weeks and people were
aware of the compulsions before the Centre for increasing fuel prices. He added
that if the public sector oil marketing companies were allowed to suffer losses,
in the long run it would increase the rate of inflation.
Earlier, Mayawati had ruled out reduction of VAT on
diesel, as the tax rate in UP was already lower than most other states. In her
letter to Prime Minister Manmohan Singh during 2008-09, she mentioned that UP
had lowered VAT on diesel from 21 per cent to 17.23 per cent, while VAT on LPG
was waived completely. She asserted there was no headroom for cut in VAT.
Instead, Mayawati had urged the Centre to rollback the latest round of fuel
price hikes .
Jaiswal also alleged misuse of central funds in the health sector by the state
government. “The gross misuse of funds has already led to spate of killings in
the state and the fear of being exposed resulted in the murder of a deputy chief
medical officer (CMO) inside jail.”
