"Cut Tax On Fuel, Not Imported Liquor": Centre vs States After PM Attack

Stung by Prime Minister Narendra Modi's put-down on live telecast yesterday, over states not cutting taxes to bring down petrol and diesel prices, opposition Chief Ministers are pushing back using sharp words in an escalating row with the Centre. 

Flagging higher fuel prices in many opposition-ruled states during a meeting on Covid, PM Modi called it "injustice" and urged the Chief Ministers to reduce VAT (Value Added Tax) on petrol and diesel to help the common man. He said many states had not agreed to the Centre's call for reducing VAT after his government slashed excise duties in November and named Maharashtra, West Bengal, Telangana, Andhra Pradesh, Kerala, Jharkhand and Tamil Nadu. 

Reacting to the furious backlash from opposition Chief Ministers, Union Minister Hardeep Puri sneered that petrol would be cheaper if opposition states reduced taxes on fuel instead of liquor. 

“Petrol will be cheaper if opposition ruled states cut taxes on fuel instead of imported liquor! Maharashtra govt imposes ₹32.15/litre on petrol and Congress-ruled Rajasthan ₹29.10. But BJP-ruled Uttarakhand levies only ₹14.51 and Uttar Pradesh ₹16.50. Protests cannot challenge facts!” – Mr Puri tweeted this morning. 

The swipe landed as Telangana Chief Minister K Chandrasekhara Rao remarked that the Prime Minister “should feel ashamed” to ask states to cut taxes and stressed that there had been no hike in fuel tax since 2015 in his state. 

"It is a drama conference in which he (PM) will make Chief Ministers sit for three-four hours and not listen to what they say. Nothing useful comes out of it. What was today's conference on? It was on covid numbers increasing again and how to keep it in check. But what does he talk about? That states must cut taxes. He should have some shame. He should feel ashamed. He says don't put burden on people, then why does he put it, am asking Modi straight," Mr Rao, popularly known as KCR, said.  

“Why can't the centre cut taxes instead of asking states? The Centre has not only enhanced taxes, it also collects cess. If you have the guts, explain the enhanced taxes,” he added.

KCR called it a conspiracy to financially weaken states vis-a-vis the Centre, “so that we have to stand with a begging bowl before them". 

West Bengal Chief Minister Mamata Banerjee said her government had spent Rs 1,500 crore in the last three years to subsidise petrol and diesel prices. “PM Narendra Modi has delivered a completely one-sided and misleading speech. Facts shared by him were wrong. We have been providing a subsidy of Re 1 on every litre of petrol and diesel for the last three years. We've spent Rs 1,500 crore on this," she told reporters. 

"We have dues of Rs 97,000 crore with the Centre. The day we get half of the amount, the next day we will give Rs 3,000 crore petrol and diesel subsidy. I have no problem with subsidy but how will I run my government?" Ms Banerjee said. 

She claimed there was no scope for the Chief Ministers to speak at the meeting, so they could not counter the Prime Minister. 

She also called out PM Modi for showering praise on BJP-ruled states like Uttar Pradesh and Gujarat for providing petrol and diesel subsidy of Rs 5,000 crore and Rs 3,000 crore. These states get good financial aid from the Centre, she claimed, and in contrast her state received very little. 

The Chief Minister's Trinamool Congress party lashed out at PM Modi on Twitter. "Mr. @narendramodi, it was your HEINOUS AGENDA to shame states today. What is the Centre doing to reduce the burden of people? What measures are being taken to curb the rising prices of essential commodities? DON'T BULLDOZE DEMOCRAZY. Take lessons from us!" it said. 

Trinamool Congress Leader Saket Gokhale tweeted, “Through fuel taxes, Modi govt earns ~ 8 lakh crores But there's another hidden revenue source: As largest shareholder, Modi govt earned over 50,000 crores as dividend from oil companies Modi blames states while being silent on where this money is going!” 

Maharashtra Chief Minister Uddhav Thackeray said state governments could not be held responsible for the spike in fuel prices. 

"Today, in the price of one litre of diesel in Mumbai, Rs 24.38 is for the Centre and Rs 22.37 is for the state. In petrol price, 31.58 paise is central tax and 32.55 paise state tax. Therefore, it is not a fact that petrol and diesel have become more expensive due to the state," he said.

Mr Thackeray said Maharashtra raised the highest GST (Goods and Services Tax) of 15 per cent in the country. Combining both direct taxes and GST, Maharashtra is the number one state in the country," he said.