Former union minister P Chidambaram on Sunday acknowledged that the facts about the tax cut on petrol prices announced by the central government were “contrary to” what he had said earlier. On Saturday, Union Finance Minister Nirmala Sitharaman announced a reduction of R8 a liter of petrol tax and R6 a liter in diesel to reduce rising fuel prices due to rising global crude oil prices during the Russian war in Ukraine.The minister also urged provinces to reduce VAT on petroleum products so that people can relax.
“I wish to urge all provincial governments, especially the provinces where the reduction was not made in the last round (November 2021), to apply the same cuts and provide relief to ordinary people,” he added.Chidambaram, criticizing Sitharaman’s reduction in tariffs and calling on provinces to follow suit, said the provincial finance minister’s recommendation was “meaningless” as 41 rupees for “extra money” belonged to the provinces.
“It means the Center has reduced 59 salaries and the provinces have cut 41 salaries. So, don’t point fingers, ”he wrote on Twitter. “The reduction will be if the Agency reduces the tariff on petrol and diesel (which can not be met by provinces)”On Sunday, a top congressman made it clear that Sitharaman had used the term “property tax” when announcing the tax cuts, but the cuts were an additional tax, not allocated to the provinces.
“Therefore, contrary to what I said yesterday, the entire burden of mitigation falls on the Center. At that moment, I am ready, ”he said on Twitter.However, he argued that the provinces “receive a small portion of the revenue share” from petrol as their revenue comes from VAT on petrol and diesel.”I wonder if they will be able to give up that money unless the Agency provides additional funding or provides them with additional benefits,” he added.
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