Industry & Economy
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Petroleum
Maharashtra may cut sales tax on petrol, diesel
Rahul Wadke
Mumbai
,
Sept. 13
THE Maharashtra Government is considering sales tax reduction on petrol and diesel, in an effort to reduce the burden of the recent hike.
The Maharashtra Finance Minister, Mr Jayant Patil, told Business Line on Tuesday that the move was targeted towards giving relief to the common man, who had to bear the maximum brunt of the price hike.
"The Finance Ministry will take about two weeks to come up with a proposal. This would be submitted to the Cabinet for approval," he said.
He, however, refused to be drawn to specifics as to what the sales reduction would mean to the consumers in the State. The Government's attempt is to find a middle path, where people get relief from the price rise and also the State's revenue stream remains constant.
"The reduction in petroleum prices in the State could lead to higher volumes of businesses, which would bring in higher revenue for Maharashtra. The revenue generation in the border areas of the State could climb as a result of the tax cut," Mr Patil said.
According to the Finance Department's cash flow statement for 2005-06, the State has earned Rs 5,460 crore as sales tax on motor sprits and lubricants in the last fiscal year. This is against the total sales tax revenue of Rs 22,128 crore for 2004-05.
Currently, in Mumbai, Thane and Navi Mumbai sales tax on diesel is 34 per cent while on petrol it is 30 per cent. Both petrol and diesel attract a surcharge of a rupee per litre. For rest of the Maharashtra, the sales tax component is 31 per cent for diesel and 29 per cent for petrol, with a surcharge of a rupee each.
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