Thiruvananthapuram: In spite of opposition criticism, the Kerala government reaffirmed its standpoint on Friday, saying that due to the state's unique tax structure, it could not forego fuel taxes due to the dire financial situation and that there was a natural proportionate decrease in the state tax with the Centre's tax cut. During the COVID-19 period, many other states increased fuel taxes and introduced cess, but Kerala did not, despite the plight of struggling commoners, state Finance Minister K N Balagopal told a press conference here.
Balagopal claimed that the Centre's current decision to slash excise duty on gasoline and diesel was prompted by the BJP's recent losses in bypolls across the country. Kerala's decision not to reduce the additional fuel tax was justified by the Finance Minister, who stated that the state tax on gasoline and diesel had not been raised in six years and had even been reduced once.
The state government has also launched several financial relief packages for those affected by COVID-19 and recent disasters, as well as increased the dearness allowance by 6%, according to the minister, all of which could be impacted if fuel taxes are reduced. Balagopal went on to say that the federal and state tax structures for gasoline and diesel were different, and that if the federal government reduced its tax or the basic price of fuel, it would naturally reflect in the state tax as well, as a proportionate decrease would occur.