Thiruvananthapuram: Veteran Congress leader and former Union Finance Minister P Chidambaram took a jibe at the Central Government over fuel tax revision. Referring to Kerala Finance Minister K N Balagopal's revelations about fuel tax collection, in a pun, Chidambaram said it is the model of 'co-operative federalism' practised by the Modi government. He pointed out the glaring disparity of amount shared with states and Centre's share.
"Kerala FM has today revealed some figures on taxes collected on petrol and diesel. If they are wrong, the Union FM must issue a rejoinder. The numbers reveal that Rs 3,72,000 crore was collected in 2020-21 as excise duty, cess and additional excise duty," Chidambaram tweeted.
"Of this huge sum, only Rs 18,000 crore was collected as basic excise duty and 41% of that amount was SHARED with the states The remaining amount of Rs 3,54,000 crore went to the Centre This is the model of 'co-operative federalism' practised by the Modi government!
"Besides, where and how and on what was this humongous amount of Rs 3,54,000 crore spent? One part was used to fill the hole created by reducing corporate taxes and giving the corporates a bonanza of Rs 1,45,000 crore."
Balagopal's address in Kerala Assembly
Balagopal had minced no words while exposing the stand of the Central government regarding fuel prices and how it has been strangulating the states for making extra money during his address in the Assembly on November 10.
Balagopal said that India was one of the countries that collected highest taxes on fuel. He said Central government was trying to save its face by reducing a fraction of the taxes that were hiked and by not sharing a single rupee with the states.
"Centre had increased the taxes by over Rs. 30 rupee per litre. They did not follow the common tax laws while hiking the excise taxes. States will not get any share from this and the reduction that they had affected was only on these hiked taxes. It is like a pickpocket giving vehicle charges for their victims," Balagopal said.
Price hikes against the constitution
The tax revenue the Centre expected in the 2020-21 Budget was 2.67 lakh crores but the actual revenue received was 3.61 lakh crores. The base excise tax that was Rs.9.46 lakh crores was reduced to Rs.1.4 lakh crores meanwhile hiking the cess, additional taxes and agriculture cess, that the Centre need not share with the States, were hiked to Rs.31.5 and was collected solely to the Centre's coffins. As per the existing rules, a surcharge is a miniscule amount added additionally to an existing tax, Balagopal said.
The Constitution gives a provision of imposing such cess and surcharge during extraordinary situations like pandemic, war or natural calamities. But hiking it several times more than the existing tax is against the Constitution or misinterpreting the Constitutional values. "This is an encroachment on to the financial sustainability of the States by the Centre," Balagopal added.
Election debacle behind the reduction in prices
Nobody can justify the collection of cess that is about 8 times more than the basic tax. The Modi government increased the Cess and Special Additional Excise duty, which was just Rs. 8.276 in 2014 per litre of petrol, to Rs. 31.5 by 2021. It is a hike of 281 per cent. The Cess and Special Additional Excise Duty per litre of Diesel, which was Rs. 2.104 in 2014 have been hiked to Rs. 30 by 2021. Central Government does not share even a penny from this revenue with the States. When BJP suffered badly in the by-polls in the country, they reduced just Rs.5 on Petrol and Rs. 10 on Diesel per litre.
Even after this reduction, the Centre is getting Rs. 27.90 per litre of petrol and Rs. 21.80 per litre of diesel. The centre is just giving less than 5 per cent of the total taxes collected on fuel to the States, Balagopal said.
Also read:Kerala not to reduce fuel prices; Cong, BJP warn of protest
