CM rules out sales tax cut on petrol

State levies 25 per cent sales tax on petrol, 18 per cent on diesel

“There is no such proposal (to cut sales tax on petrol) before the State government. It is the Centre which has hiked petrol prices and the State governments should not be blamed,” Gowda said, replying to queries from reporters on the sidelines of a Janata Darshan programme at the CM’s home office Krishna.

According to official sources, the latest hike in petrol price will help the State get an additional Rs four crore a month. State taxes on fuels are ad valorem and move in proportion with any rise in petroleum prices.

Every time the Centre effects a hike in petrol and diesel prices, the State government laughs its way to the treasury as the State taxes are imposed on the basic price.

The State charges 25 per cent sales tax on petrol and 18 per cent sales tax on diesel. In addition, there is a five per cent entry tax that is levied on every litre of petrol or diesel coming into the State. The sales tax component is one of the highest among states in the country. To another query, Gowda said the State government will take a decision on the demand by State Government Employees Association to increase the interim relief announced under the Sixth Pay Commission from 12.5 per cent to 15 per cent.

“We have explained the constraints of the State government to the association. The finance department’s opinion will be taken and a final decision will be announced within a week,” the chief minister said.

Gowda said a decision on finalising BJP’s candidate for the Bellary bypoll will be taken in two to three days.

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