K'taka Govt not to reduce sales tax on petroleum products

Bangalore, June 28 (UNI) The JD(S)-BJP coalition Government in Karnataka today rejected in the Legislative Council the Opposition Congress' plea to reduce sales tax on petrol and diesel to reduce the burden on consumers, caused by the steep hike in oil prices.

Replying to a question raised by Mr Aravinda Limbavali (BJP), Deputy Chief Minister B S Yediyurappa said the Government had factored revenue growth arising out of increase in oil prices in its 2006-07 budget estimates. Foregoing anticipated revenues would not only affect the financial indicators, but also cripple the State's development plans.

He said the State Government had spent over Rs 75 crore for supplying quality seeds to farmers during this khariff season as against the budgetary provision of Rs 44 crore. It was also spending over Rs 150 crore for repairing and maintaining state roads, much above the promises made in the budgetary proposals.

Mr Yediyurappa brought to the notice of the House that the price of diesel in Karnataka was comparatively lower than other states.

While the price of diesel in Maharashtra was Rs 39.96, Rs 37.50 in Gujarat and Rs 37.07 in Madhya Pradesh, it was Rs 37.05 in the state.

Intervening, Congress member V R Sudarshan said that by reducing the sales tax on petrol and diesel in the State, its sales would improve, resulting in more revenue to the State. The State was losing revenue as consumers living in bordering areas procured it from the neighbouring States where the prices were less.

Mr Limbavali opined that by reducing the sales tax, the burden of the consumers could be eased to some extent. JD(U) member M P Nada Gouda said the State Government would benefit by over Rs 200 crore indirectly due to the increase in the price of petroleum products.

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