State coffers to get richer with fuel price hike

State coffers to get richer with fuel price hike

Rise will fetch an additional revenue of Rs 20 cr a month

The steep hike in petrol prices will fetch the State government an additional revenue of Rs 20 crore per month.

In Karnataka, 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 State taxes are imposed on the basic price.

The petrol price in the State went up by Rs 8.24 a litre after the recent hike. According to sources, the State will get an additional Rs two on the sale of every litre of petrol. The average daily sales of petrol is around 38 lakh litres.
The State has kept autofuels out of the Value Added Tax (VAT) regime and 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 levied on every litre of petrol or diesel coming into the State. The sales tax is one of the highest in the country.

The State government earned a whopping Rs 5,545 crore from sales tax on petrol and diesel sale during 2011-12, official sources said.

In the backdrop of the ever-increasing petrol prices, the State BJP has appealed to Chief Minister D V Sadananda Gowda to reduce the taxes levied on petrol, so that it could bring some relief to the consumers of Karnataka.

Addressing the media in Bangalore on Thursday, BJP spokesperson C T Ravi said a delegation of BJP leaders will meet Sadananda Gowda once he returns from Mumbai, and urge him to reduce the taxes on petrol, just as the BJP government has done in Goa.

Ravi said in the last three years, the UPA government had effected 100 per cent hike in petrol prices. The latest hike would adversely impact the poor, he said, adding that soon the petrol prices would hit Rs 100 per litre, given the present trend. He said that the BJP will stage State-wide protests against this on Friday.

CPM to protest

The CPM will stage protests at all taluk headquarters in the State on May 31 in protest against the steep hike in petrol prices. CPM State Committee member G N Nagaraj told reporters here that the decision to hike petrol prices was unjust and demanded a roll back.

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