New Delhi
After taking a critical view of the central government’s request to the states to cut taxes on petrol and diesel, former Union Finance Minister P Chidambaram on Sunday said the facts about the states’ share of tax reduction are contrary to what he had said previously as the entire burden of the duty cut would fall on the centre.
“The notification on reduction of duty on Petrol and Diesel is now available. FM used the words ‘Excise Duty’, but the reduction is in Additional Excise Duty which is not shared with the states,” Chidambaram said in a tweet.
“Hence, contrary to what I said yesterday, the entire burden of the reduction falls on the Centre. To that extent, I stand corrected,” he said.
Union Finance Minister Nirmala Sitharaman on Saturday announced an excise duty cut of Rs 8 per litre on petrol and Rs 6 a litre on diesel.
Sitharaman also requested state governments to cut taxes on petrol and diesel in order to provide relief to the common people.
Taking a critical view of the finance minister’s request’ Chidambaram had said the request to the states was “meaningless” as 41 paise of a rupee in “central excise” belong to the states.
“It means that Centre has cut 59 paise and the States have cut 41 paise. So, dont point fingers,” Chidambaram said in a tweet on Saturday.
However, in a series of tweets on Sunday, the former finance minister corrected himself saying the entire burden of the reduction in the tax will fall on the central government.
Chidambaram further noted that “the states are getting very little by way of share of duties on Petrol and Diesel. Their revenue is from VAT on Petrol and Diesel.”
