New Delhi, Dec 21 (UNI) CPI(M) MP Tapan Sen has urged the UPA government to accept the recommendations of the Parliamentary Standing Committee on Petroleum and Natural Gas on the rationalisation of taxes on crude oil to avoid burdening consumers by price hikes without affecting the financial position of the public sector companies.
In a letter to Prime Minister Manmohan Singh, he said the acceptance of the recommendations of the Committee on reduction in customs duty, taxes and cess on crude oil, produced by the Oil and Natural Gas Corporation (ONGC) and Oil India Limited (OIL), will reduce the cost of production of all petroleum products.
''The customs duty on crude oil should be reduced to zero from the prevailing rate of 5 per cent. In view of the sharp rise in global crude oil price coupled with increasing domestic demand, this is the best time to bring the custom duty to zero, as conceived by the Expert Technical Group way back in 1997 and accepted in principle by the then Government,'' he wrote.
Mr Sen suggested that the excise duty should not be levied ad valorem as this component multiplies the impact of high oil price, but should rather be specified in term of Rs/tonne.
The letter claimed that the cess on indigenous crude oil, produced by ONGC and OIL, levied as per Oil Industry Develpment Act 1974, should be abolished as it is not serving the purpose for which the Act was made and the cess amount of Rs 7500 crore approximately should be used for giving relief to the consumers.