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Uttar Pradesh to lower state tax on diesel

Written by: Staff

Lucknow, Sep 10: The UP government is likely to bring down the state tax on diesel from the existing 22 per cent including state development tax of one per cent, to 12 per cent making it somehow rational with the nearby states like Delhi, Haryana, Uttaranchal and Punjab, official sources said.

After the decrease of 10 per cent tax on diesel, the commodity is expected to be cheaper by over Rs 3.50 per litre in the state.

However, there is no proposal to interfere in the present tax structure on petrol (25 per cent), Kerosene( 11 per cent) and LPG (5 per cent).

According to official sources here, Chief Minister Mulayam Singh Yadav had already given his approval for the cut down in the taxes of diesel as it would have wide impact on the rural economy of the state.

The officials are nowdays busy on how to cope up the financial losses estimated to be about Rs 70 crore through this decision and alternative measures are being chalked out to fulfill the gap.

Meanwhile, Uttar Pradesh Petrol pump dealers association president P N Shukla told UNI here that due to irrational tax structure, the sale of diesel in the state has come down by 50 per cent as the rate was less by Rs 3 per litre in the adjoining states of Delhi, Haryana and Uttarnanchal.

''We have apprised the CM about our problem and he has assured to do the needful at the earliest,'' Mr Shukla said.

The Petrol pump owners in the state had called for a day's strike on August 12 last on their seven-point charter of demand including lowering of the tax structure. On August 14, CM had a meeting with a four-member delegation of the Association over the issue.

However, UP Petrol dealers association president Mr Shukla maintained that the association has assured the government to cope up with the loss of revenue after the decrease in the tax by the government. ''The revenue of the government will go up automatically as the sale will go up after the price of diesel would be rational with other states'', he claimed.

According to a recent report by the Oil companies, the growth of sale of diesel in UP was zero against the nominal growth of 15 to 31 per cent in Uttaranchal, Haryana, Delhi and Punjab since May last.

Delhi recorded the highest growth of 31 per cent sale of diesel in the past three months.

Lucknow petrol dealers association president Mohammad Jubeer said it was a long pending demand of the dealers to cut down the tax rate so that their is a fair competition with other states.

''When the tax of adjoining states are around 12 per cent then who will purchase diesel from the state on 22 per cent tax'', he questioned.

Reports claim that Delhi, Haryana and Uttarnachal have only 12 per tax on diesel and petrol. Punjab has the lowest tax of 8.5 per cent on petrol and diesel.

Earlier, the UP government was given examples of some southern states where the tax was as much high as 33 per cent and claimed that the UP was much more behind with only 22 per cent.

However, sources said the state government's largest tax collection is through the oil sector and it did not want to disturb the present growth in the revenue on this head. Of the total taxes collected in the state, about 37 per cent comes from the oil sector.


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