Fuel price rise due to Centre’s cess & surcharge: Kerala Finance Minister

Aggrieved over Prime Minister Narendra Modi laying the blame of rising fuel prices on non-reduction of VAT by states like Kerala, state Finance Minister K N Balagopal on Wednesday hit back saying the increase in petrol and diesel rates was due to the cess and surcharge levied by the Centre.

He said Kerala has not increased taxes on petroleum products in the last six years.

When the state government has not increased taxes on petrol or diesel by even one rupee in the last six years, then how can it be asked to reduce taxes, Balagopal asked.

He further said the reason for rise in fuel prices was not due to increase in state taxes, but the cess and surcharge levied by the Centre on sale of petrol and diesel which amounts to cutting into the state’s share of the revenue from petroleum products.

The minister said that cess and surcharge are to be levied only in special circumstances like natural calamities, pandemics, etc. and for a specific period like six months or a year.

They cannot be levied for an indefinite period of time, even the Supreme Court has said so, Balagopal claimed while speaking to reporters here in the wake of Modi’s statement that many states were not adhering to the Centre’s call for reducing the Value Added Tax (VAT) on petrol and diesel after his government slashed excise duties on them in November last year, and called it ”injustice” to people living there and also harmful for neighbouring states.

Balagopal said the Prime Minister should not have made such statements as they lead to misunderstanding among the general public.