The Hindu Business Line : Karnataka reduces sales tax on fuel

Bangalore, June 19 Karnataka on Thursday announced the reduction of sales tax and value added tax (VAT) on petrol and diesel and VAT on Liquefied Petroleum Gas (LPG).

Announcing the decision taken by the Cabinet here on Thursday, Ms Shobha, Karandlaje, Minister for Rural Development and Panchayat Raj, told newspersons that the reduced price would take effect from June 20.

The government reduced the sales tax on petroleum and diesel by three and two per cent respectively and on LPG by one per cent. Following this decision, all the petroleum products would cost less.

The Centre raised prices on petrol and diesel by Rs 5 and Rs 3 a litre respectively and LPG by Rs 50 on June 6.

The prices of petrol will become cheaper by Rs 1.35 from the existing rate of Rs 58.50 per litre. Diesel will cost less by 65 paise from Rs 39.80 a litre. LPG will see a reduction by Rs 10.34 a cylinder from Rs 358.42.

New rates

The new petrol price will be Rs 57.15 per litre. Diesel will now cost Rs 39.15 and LPG Rs 348.08. The new prices will mean a loss of tax revenue of Rs 275 crore annually to the government exchequer, the minister said.

“This is the best we can do for our people since the basic price of petrol and diesel is higher in Karnataka than the neighbouring states of Tamil Nadu and Kerala,” Ms Karandlaje said.

She said the State government would urge the Centre to reduce the basic prices of the petroleum products to lessen the burden on consumers.

Levies add-up

About 59 per cent of the retail price in Bangalore and Karnataka are central and state levies in the form of sales tax, entry tax, excise duty and cess, making the cost of petrol highest in the country.

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