The Hindu : Tamil Nadu / Chennai News : Jayalalithaa rules out reduction in sales tax on fuel

Online edition of India's National Newspaper
Tuesday, Sep 27, 2005

Tamil Nadu

Tamil Nadu - Chennai

Jayalalithaa rules out reduction in sales tax on fuel

Special Correspondent

Asks Centre to implement plan suggested by Communist Parties to contain rising prices

CHENNAI: Chief Minister Jayalalithaa on Monday ruled out the possibility of scaling down the State Sales Tax (SST) on diesel and petrol.

Stating that there was no justification for the demand, she urged the United Progressive Alliance (UPA) Government at the Centre to implement the alternative plan suggested by the Communist Parties to contain rising fuel prices.

Intervening in the debate on the first Supplementary Statement of Expenditure for 2005-2006, she said the UPA Government had increased the price of petrol by 30 per cent and diesel by 40 per cent during the last 15 months, "as if attempting to create a Guinness Record on this score."

She pointed out that the Dravida Munnetra Kazhagam and the Pattali Makkal Katchi were part of the Centre, which was backed by the Communists.

Big burden on poor

Ms. Jayalalithaa said when the prices go up, they place a big burden on the poor and the middle class.

In Tamil Nadu, SST is being levied at the rate of 25 per cent on diesel and 30 per cent on petrol. Almost all other States are following the pattern.

In some States, the SST is more than in Tamil Nadu. It is being levied for carrying out welfare projects.

Spiralling prices

She said considering the financial resources made available to States, it was unrealistic to expect them to help the Centre.

She said the Centre should compensate the spiralling crude oil price in the international market by restructuring excise and customs duties, cess on petrol and diesel and the profits earned by refineries. Only then can common people be shielded from the impact of the crude oil price fluctuation. She criticised the price hike on crude oil manufactured in the country.

Ms. Jayalalithaa said the State Transport Corporations (STCs) would incur additional expenditure of Rs.122.50 crores a year, owing to the fuel price hike.

Wage increase

She said the wage increase for STC employees, the decision not to increase bus fare and withdrawal of SST on diesel used by fishermen would cost the exchequer Rs.63.5 crores.

Her Government had been acting as a "shock absorber" to protect the poor.

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