TAX NEWS - 2010

No tax relief on petro products

JAIPUR, India -- Even as a hue and cry is on over the hike in petroleum products due to decontrol of prices and its cascading effect on all the other sectors which may fuel inflation, the state government has not yet given a thought to give any tax relief to the people.

Rajasthan is one of the few states where the state tax on petroleum products is on the higher side. At present, petrol and diesel are taxed at 26% and 18%, respectively in the state. The Rajasthan Petroleum Dealers Association has been demanding a tax regime at par with the neighbouring states to prevent smuggling and business loss to successive governments but has not been successful. The state government has been pointing to revenue loss and a higher tax regime in states like Gujarat to justify its stand.

Additional chief secretary, finance, C K Mathew, said recently, "We have not given a thought to it. Our tax structure is higher than Haryana and Delhi but it is lower than states like Gujarat which is a neighbouring state," he said.

Meanwhile, the Rajasthan Petroleum Dealers Association, which has been clamouring for tax relief said the association believes that the cut in state tax could be compensated by increased sales volume.

However, the association welcomed the Centre's decision to decontrol the prices of petroleum products as a positive step. Secretary of the RPDA Shashang Kaurani said the decontrol would definitely help the state-controlled petroleum companies bleeding under a subsidised regime to recover and ease entry of private entrepreneurs into this sector in a big way.