Gujarat flays petro products’ price hike

June 7th, 2008 - 10:54 pm ICT by IANS  

Gandhinagar, June 7 (IANS) Criticising the central government for hiking the prices of petro products, the Gujarat government Saturday said any sales tax cut on the fuel would only hit the state’s earnings. Whether Gujarat will cut sales tax on petrol and diesel or not will be known only after an expert panel constituted by the government a few days back gives its report, said government spokesperson and Health Minister Jay Narayan Vyas.

While many states have cut sales tax on fuels to provide relief to consumers, Vyas said the state gets revenue from value-added tax (VAT) and sales tax and any cut will play havoc with the financial liquidity of the state unlike the central government which has wide taxation powers.

Addressing mediapersons here, Vyas said a misconception was being spread that rise in fuel costs would help Gujarat earn extra Rs.4.50 billion by way of VAT. “This increase of revenue is a myth,” he said.

“The irony is that other states show losses due to VAT implementation and the central government fully compensates them. We do not show any VAT loss because our records are well-maintained, our work is efficient and transparent.”

Flaying the move to raise prices of petrol, diesel and cookign gas, he said: “The hike is very harmful. It gives us an uneasy feeling about the future.”

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