Misleading remarks, says Kerala fin min after PM’s dig at state over VAT on fuel prices

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KN Balagopal, Narendra Modi / Photos: Mathrubhumi, PTI

Thiruvananthapuram: At a time when Prime Minister Narendra Modi is receiving flak over his dig at opposition ruled states including Kerala, finance minister KN Balagopal reacted to the matter.
According to Balagopal, Modi’s remarks are misleading and the latter being a PM of the country should not play politics with his words. Notably, Modi raised the issue of many states not adhering to the Centre's call for reducing the Value Added Tax (VAT) on petrol and diesel after his government slashed excise duties on them in November last and called it an "injustice" to people living there.

Balagopal put forth the context and why PM’s statement is misleading. “In the last six years, Kerala has not increased excise duty. How come a state government that has not increased the excise duty will reduce it?”, he asked.

The finance minister further explained matters related to VAT to justify his argument.

“In 2017, the Centre was levying an excise duty of Rs 9. However, now the excise duty touched Rs 31. Reducing the excise duty by Rs 1 after multiple hikes is not something right. The Centre should reduce the excise duty which touched 31 now,” he said.

He added that the reason for the rise in fuel prices was not due to an increase in state taxes, but the cess and surcharge levied by the Centre on sale of petrol and diesel which amounts to cutting into the state's share of the revenue from petroleum products.

The minister said that cess and surcharge are to be levied only in special circumstances like natural calamities, pandemics, etc. and for a specific period like six months or a year.

They cannot be levied for an indefinite period of time, even the Supreme Court has said so, Balagopal claimed.

Apart from Balagopal, many other leaders in Opposition parties accused PM of playing politics during his meeting with chief ministers on the Covid situation by raising the issue of fuel prices and "passing the buck" on to states to reduce VAT on petrol and diesel.

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