New Delhi, June 5: Congress President Sonia Gandhi has today directed states, where the party is in power, to reduce sales tax on petrol and diesel.
This is with a view to offset the effect of the fuel price hike that became effective from today. The Central Government has raised the price of petrol by Rs 5 a litre and that of diesel by Rs 3 a litre. The price of a Liquefied Petroleum Gas (LPG) also has been increased by Rs 50 a cylinder. Kerosene price has been left untouched. The West Bengal Government has decided to the reduce sales tax on petrol from 25 per cent to 20 per cent and in diesel from 17 per cent to 12.5 per cent. The Kerala Government has also announced concessions in these products, but the rates are yet to be decided.
Even in the states where Value Added Tax (VAT) is applicable, sales tax on these products can be reduced.
Meanwhile, the custom duty on crude oil has been abolished. Custom duty on petroleum and diesel has been slashed to 2.5 per cent from 7.5 per cent. The custom duty on other petroleum products has been reduced from 10 per cent to 5 per cent.
This is the second price hike in a period of four months. It was last increased on February 14.