Bear 50% of tax reduction as states have limited funds: Bihar Dy CM

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New Delhi, Jun 16 (UNI) States today urged the Centre to bear 50 per cent of the Rs 8,000 crore revenue loss faced by them on account of sales tax reduction in fuel prices.

''After the duty cuts, the states face a revenue loss of Rs 8,000 crore. The Centre should compensate 50 per cent of this amount as states have a limited means and hence, they can not bear such losses,'' Bihar Deputy Chief Minister and Finance Minister Sushil Kumar Modi told UNI.

After the reduction in sales tax, prices of petrol, diesel and LPG are varying from state to state by Rs one to two, which has resulted in sales and revenue losses to the states, he added.

The Empowered Committee of state finance ministers on Value added tax (VAT) today met here to discuss the impact of the price hike on petroleum products and reduction in sales tax announced by states.

The Group also expressed concern over the different pricing pattern of petroleum products among states, keeping the base price uniform and said the public sector Oil Marketing Companies should inform the states of the price structure of these products.

The states have requested the Centre to maintain transparency while determining the prices of the products.

Mr Modi said 12 states have reduced the sales tax on petrol, diesel and PLG. ''Bihar has reduced sales tax by two per cent each on petrol and diesel, while tax on LPG has been reduced to one per cenmt from four per cent,'' he said.

Five states, including Delhi and Bihar, have reduced taxes on LPG.

The Centre had announced a price hike on June 5, following the mounting pressure on OMCs as the international crude prices touched an all-time high of 135 dollars a barrel.

It raised the prices of petrol and diesel by Rs five and three respectively, while hiking LPG prices by Rs 50.

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