New Delhi: Prime Minister Narendra Modi’s unusual appeal to opposition ruled states on Wednesday to reduce the state-specific value-added tax (VAT) has kicked up a storm over the nature of Centre and state taxes on petroleum products. Several opposition-ruled states and the principal opposition party, the Congress, criticized the Prime Minister for using the meeting with state chief ministers on the issue of COVID management as a platform to highlight the issue of high taxes imposed by them on the petroleum products, particularly petrol and diesel.
While opposition-ruled states such as West Bengal and Telangana criticized the Prime Minister for bringing up the issue of state taxes on petroleum products in his address at the end of COVID meeting with state chief ministers, the Congress asked the Prime Minister to account for Rs 27 lakh crore that the Centre has earned as taxes from the petroleum sector. The party said that states only get 32% of the total taxes and duties earned from the petroleum sector while the Centre gets the remaining 68% of taxes and duties.
However, instead of cooling down, this war of words of accusation and counter-accusation further intensified on the next day as Petroleum Minister Hardeep Singh Puri blamed high state taxes on aviation turbine fuel (ATF) for high flying costs in the country. In a Tweet, Puri said: “Ever wondered why air ticket prices haven't come down? Aviation Turbine Fuel constitutes about 40% of the cost of airline operations. But West Bengal, Maharashtra & Delhi impose massive 25 percent plus VAT on ATF while BJP states UP & Nagaland; & UT of J&K charge just 1 percent.”