The Hindu Business Line : UP Govt rules out cut in sales tax on petrol, diesel

The Uttar Pradesh Government has no plans to reduce sales tax on petrol and diesel, the State's Agriculture Minister, Mr Ashok Bajpai, said hereon Thursday. The State Government has urged the Centre to give 25 per cent subsidy on the diesel used for agriculture by the farming community.

"We don't have any intention of reducing sales tax on diesel and petrol. Sales tax forms an important component of our revenues and most of it is used for developmental work in the State," Mr Bajpai told presspersons on the sidelines of a meeting of the Empowered Committee of State Finance Ministers on Value-Added Tax (VAT).

After the Centre's recent move to hike petrol and diesel prices by Rs 4 and Rs 2, respectively, the Union Petroleum Minister, Mr Murli Deora, had written to chief ministers requesting them to forego VAT/sales tax revenues on the incremental hike in prices.

Seeks subsidy

Even as the Centre had requested the states to cut sales tax on petrol and diesel, the Uttar Pradesh Government has now written to the Centre seeking 25 per cent subsidy on the diesel used by the farming community for agriculture.

"Soon after the recent increase in the prices of petrol and diesel by the Centre, I have written to both the Union Petroleum Minister as well as the Union Agriculture Minister seeking 25 per cent subsidy on diesel used in agriculture by farmers," Mr Bajpai said.

He highlighted that the cost of inputs for agriculture had substantially gone up and that some of the farmers were finding it difficult to earn a livelihood from agriculture as it was turning out to be a loss-making proposition.

While petrol attracts 25 per cent sales tax in Uttar Pradesh, that of diesel stands at 20 per cent.

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