Wednesday, July 07, 2010

High taxes fuel citizens’ worry

High taxes fuel citizens’ worry
Govt Says It Has Done Its Bit To Bring Down Rates

Bangalore: The BJP government may have ensured the bandh’s success in Karnataka. But the moot question remains: what are the initiatives it has taken to bring down taxes.
The basic price of fuel and taxes levied in Karnataka are the highest in India. On the basic price of petrol, there is an entry and sales tax, besides a dealer’s commission.
Entry tax is 5% on fuel while sales tax is 25% on petrol and 18% on diesel respectively. There is no entry tax for diesel. The government has put the onus on the Centre to reduce fuel rates, maintaining it had brought down sales tax on petrol from 28% to 25% and diesel from 20 to 18% within a month of its coming to power in 2008.
Home minister V S Acharya, who represented chief minister B S Yeddyurappa at the empowerment panel meeting of state finance ministers in 2008, said the government has done its best to bring down taxes. Sales tax on kerosene sold through PDS is 1%; for domestic LPG (5%) and 13% for commercial purposes.
According to Acharya, taxes are the highest in Karnataka compared to New Delhi because of transportation costs, despite Mangalore having an oil refinery. “Though New Delhi has no refinery, it’s considered a zero transport place. However from Karnataka, transport equalization charge is collected for fuel being transported from Chennai and Cochin. The Mangalore refinery is not taken into account. If this is done, the government can sell petrol and diesel at a lower rate in at least eight to 10 districts,” he added.


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