Palanivel Thiagarajan urges Centre to remove cesses and surcharges
Tamilnadu Finance Minister Palanivel Thiaga Rajan on Thursday urged the Centre to remove cesses and surcharges on petrol and diesel revert to the 2014 rates, an act which is fair and simple.
“We have repeatedly urged the Union government to reduce the cesses and surcharges being levied and merge them with the basic tax rates so that States get their rightful share from the proceeds of the Union taxes,” Rajan said.
He was responding to Prime Minister Narendra Modi’s call on Wednesday to states to reduce the Value Added Tax (VAT) on fuel “in the spirit of cooperative federalism”.
Modi also cited the Central government reducing petrol and diesel prices by Rs 5/litre and Rs 10/litre, respectively.
According to Rajan, since Tamil Nadu levies ‘ad valorem’ taxes which are applied after Central taxes, this move by the Cebtre will cause an additional loss of about Rs 1,050 crore in annual revenue to the state.
“Given that the Union Government’s taxes continue to be exorbitant, it is neither fair nor feasible for the State Government to further reduce taxes.”
He hoped that the Central government would heed to this reasonable request in the “true spirit of cooperative federalism”.
He said the Centre’s levies on petrol have gone up substantially in the past seven years since Modi took charge for the first time in 2014.