Petro min pulls up state for not bringing down sales tax

NEW DELHI: Petroleum minister Murli Deora has criticised the Maharashtra government for not honouring its commitment of bringing down sales tax rate on petroleum products.

Maharashtra levies 34% sales tax on diesel and 29% on petrol while neighbouring states such as Gujarat charges 23.5% and 26% respectively. Goa has 21% sales tax on diesel and 22% on petrol.

Petrol pump owners have been demanding to bring down the sales tax rate to 24%. Stating that he “supports the demands of the dealers”, Mr Deora said: “I don’t support the strike.” He said that the strike was not a justified solution and the dealers should call it off.

Mr Deora said he had three rounds of meeting with Maharastra chief minister over the issue and the state government had agreed to reduce sales tax on petroleum products. “I don’t know why Maharashtra government is not acting on its words,” he said.

“Even agriculture minister Sharad Pawar had said that he would support the move,” he said. Over 2,700 dealers in Maharashtra are on strike. They have decided that they would not purchase any petroleum products indefinitely from Monday, unless the state government reduces sales tax rate on fuel products.

The strike has been resumed after a similar protest was launched by pump dealers about two months ago, paralysing petrol distribution in the state for almost two days. The strike was called off after the state assured to find out a solution soon.

Maharashtra CM Vilasrao Deshmukh had agreed in principle to bring down the sales tax. On cooperation between India and China in the hydrocarbon sector, Mr Deora said that being the two largest oil importing countries, the neighbours might “help each other in cost mitigation,” through joint bidding.

He indicated that New Delhi could have synergy and co-operation with Beijing on various fields pertaining to the oil & gas sector. “The two countries should bid together for oil assets so that we can save money. Nigerian deal is a case in hand, where we could save over $300m due to the cooperation,” he said.

He said the two countries could think of having equal stakes in foreign assets. Mr Deora, however, said there was no meeting scheduled with the visiting Chinese president.