State may drop cess on petrol, diesel

The State government, which had levied cess on petrol and diesel sold in Karnataka during 1995-2002 to raise funds for Namma Metro, is unlikely to burden dealers vis-a-vis phase II and the remainder of phase I of the project.

According to sources, the government has instead proposed to levy cess on transactions over immovable properties located along the Metro phases I and II.

The government had dropped levy of cess on petrol and diesel in 2002 after residents outside Bangalore objected to it. They questioned the rationale behind collecting cess towards development of Bangalore when the region they lived in continued to remain underdeveloped.

The government had collected Rs 470 crore between 1995-96 and 2001-2002 by levying 25 paise cess on a litre of petrol and 10 paise on a litre of diesel across the State. The State Urban Development Department, which has proposed to levy cess on property, contends that property owners along the Metro route will benefit because of the Metro.