West Bengal to cut taxes on petrol, diesel price by Re 1 per litre

State finance minister says decision taken despite Amphan, Covid stress and dues from Centre running into Rs 77,000 cr, will bring marginal relief especially to farmers who use diesel

The West Bengal government has decided to cut taxes on petrol and diesel price by one rupee a litre effective Monday midnight.

West Bengal finance minister, Amit Mitra, said that despite Amphan, Covid-related stress and dues from the Centre running into Rs 77,000 crore, the state government has decided to cut petrol and diesel prices by one rupee a litre. This will bring marginal relief to the people, especially farmers who use diesel, he said.

"To reduce the common man's burden, the state government has decided to allow rebate of Re 1 per litre on sales tax payable on sales of petrol and diesel w.e.f the end of midnight of 22nd February, 2021 till 30th day of June, 2021, " Amit Mitra tweeted.

On Saturday, at an interaction with Chennai Citizen’s Forum, Union Finance Minister, Nirmala Sitharaman, had said that she was in a “Dharm Sankat” situation due to fuel prices. 

She also said that it was a matter for both the Centre and state governments to work together and see whether there was a way to fix the issue.

Commenting on it, Mitra said, the Centre should bring down its taxes and then there could be a discussion. “We are reducing taxes by Re 1 from February 22 midnight,” he added.

Mitra also pointed out that cess accounts for a major part of the Centre’s levies in petrol and diesel, which is not shared with the state. 

Illustrating with an example, Mitra said, on February 20, the price of petrol in Kolkata stood at Rs 91.77 a litre out of which the Centre took Rs 32.90 as tax and cess; on diesel, it took Rs 31.80 as the price stood at Rs 84.55 a litre. 

Of the Rs 32.90 of Centre’s levies on petrol, Rs 20.50 was cess, which is 62 per cent; on diesel, it was Rs 22 of Rs 31.80, or, 69 per cent.

“As we all know cess is not given back to the states and the Centre is deducting a major amount as cess,” Mitra pointed out and added, “In taxes, states get back 42 per cent as devolution and hence the Centre is acquiring a major portion as cess instead of tax."

He also said that when the Modi government came to power, total aggregate cess was eight per cent of gross tax collections and now it has increased to 14.5 per cent. 

“That is why the CAG has questioned the central government on why they are increasing cess and not tax. This is a direct attack on the federal structure.”

Mitra also challenged Home Minister, Amit Shah’s allegations of corruption at a recent rally in Kolkata on Centre’s aid of Rs 3.59 lakh crore to West Bengal.

Mitra said that in six years, between 2014-2015 to 2019-2020, central schemes and centrally sponsored schemes totaled Rs 1.13 lakh crore and the source of funding was tax collection from the state.

The collection from West Bengal was approxiamtely Rs 70,000-75,000 crore a year on account of income tax, GST and import duty. 

“The fact is that the Centre collects taxes from all states and what they are giving from those funds is expected in a federalist polity. On top of that, the figure is being inflated,” said Mitra.

Mitra also pointed out that the state had spent three times the amount of central and centrally sponsored schemes on development projects from its own funds without any central assistance and its total expenditure was seven times that amount.