New Delhi: Former Union Minister P Chidambaram on Sunday admitted that facts about tax cuts on fuel prices announced by the Central government contradict his earlier claim. On Saturday, Union Finance Minister Nirmala Sitharaman announced a cut in excise duty on petrol by Rs 8 per litre and diesel by Rs 6 a litre to rein in rising fuel prices due to the rise in international crude oil prices amid Russia's war on Ukraine. In such a situation, the Finance Minister also urged the States to reduce VAT on petroleum products to provide relief to the common man.
"I would like to encourage all the state governments, especially those states where the cuts were not made during the last round (November 2021), to implement similar cuts and give relief to the common man. Now Chidambaram has taken a critical view of Sitharaman's request to cut prices and states to follow suit, claiming that, "The finance minister's call to the states is in vain. When she cuts the central excise duty by one rupee, 41 paise of that rupee belongs to the states. This means that the Centre has cut 59 paise and states have cut 41 paise. So don't point your finger.''
He wrote on Twitter, "The real cut will be when the Centre cuts the cess levied on petrol and diesel (which is not shared with the states). Today on Sunday, the senior Congress leader clarified that Sitharaman had used the words "excise duty" while announcing the tax cut, but the cut was in the additional excise duty, which is not shared with the states. In fact, Chidambaram tweeted, "I am correcting the entire burden of the shortage that I had said yesterday to the Centre. ''
However, he has argued that 'states are getting "very little as part of duty" on fuel as their revenue is from VAT on petrol and diesel. I wonder if they can afford to give up that revenue until the Centre transferred more money or gave them more grants. "