Introduce a fixed tax on gasoline and diesel: Experts | Bangalore News

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Bangalore: Chief Minister Basavaraj Bommai promised to reduce the sales tax on gasoline and diesel after the bypolls, given the economic conditions. But some experts have said cutting taxes will be pointless, given the highly fluctuating nature of oil prices. They suggested that the government impose a fixed tax rate, instead of tying it to base fuel prices. Truckers and other stakeholders have demanded such a move from the Center and state governments to control the rampant rise in fuel prices.

The Federation of Karnataka The State Truck Owners and Agents Association announced on Sunday it would besiege Vidhana Soudha on November 5, and its members would travel to district administration offices in all districts.“Prices are rising daily and the state’s tax structure is making the problem worse. Since tax rates are linked to base prices, the amount of tax increases as base prices increase. What we want is a fixed amount of tax per liter that is decoupled from the base price, so that retail oil prices are stabilized, ”said GR Shanmugappa, president of the Federation of Homeowners’ Association. and Karnataka State Truck Agents. The Karnataka sales tax on gasoline and diesel is ad valorem in nature, which means that the amount of the tax increases with the increase in the base price, and the state levies 35% and 24%, respectively , on gasoline and diesel.This is different from the fixed nature of the Additional Excise Duty (AED) levied by the Center – Rs 32.80 per liter of gasoline and Rs 31.80 per liter of diesel.“Even if the state reduces the tax, let’s assume by 5%, it will be neutralized in 15 days and we will see higher prices again. This is due to the ad valorem nature of the sales tax and the continued rise in the price of crude oil which in turn pushes up base prices for gasoline and diesel, ”said BT Manohar, member. of the Karnataka State SGT Advisory Council. He said that incorporating fuels into the GST system would create the same problem.The state levied a sales tax of Rs 26.35 on a liter of gasoline on October 1, while the base price was Rs 42.5 and the retail price was Rs 105.44. the tax rose to Rs 46.87 on October 24 (Sunday) when the base price was Rs 46.87 and a liter of gasoline sold for Rs 111.34 in outlets. “When all of the other components, including the central AED and the dealer’s commission, are fixed in nature, why don’t they set a specific amount of state sales tax on a liter of fuel? If the state government wants to stabilize prices, it should do so, ”said KM Basave Gowda, chairman of Akhila Karnataka Petroleum Dealers.“The Center and the states must sit together to formulate the tax structure. This is essential because soaring fuel prices undermine the competitiveness of the economy, in addition to pushing up the prices of other commodities, ”said the professor. Mr. Govind Rao, economist and former director of National Institute of Finance and Public Policy.

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