Opposition irked by PM Modi’s VAT remark

In Covid 19 meeting, PM changes tack, shifts onus of slashing fuel tax on to States

Opposition leaders on Wednesday reacted sharply to Prime Minister Narendra Modi’s comments that States ruled by them had not reduced value added tax (VAT) on petrol and diesel despite the Centre slashing excise duty and they should do so at the earliest in order to benefit the consumers.

West Bengal Chief Minister Mamata Banerjee and her Maharashtra counterpart, Uddhav Thackeray, pointed out how much the Centre owed their respective States. They also took the opportunity to talk about the Centre’s discrimination against Opposition-ruled States while meting out preferential treatment to BJP-ruled ones.

Ms Banerjee questioned why the Prime Minister chose to raise the issue at a meeting of Chief Ministers (CMs) that was convened to discuss the rising cases of COVID-19.

Kerala Finance Minister K. N. Balagopal said that Mr. Modi’s stand on the matter was misleading and said that instead of asking resource-starved States to slash their limited income source, the Centre should put a stop to collecting the cess and surcharge on petrol and diesel.

The Congress too said that Mr Modi’s remarks did not befit the Prime Minister’s office and were ‘irresponsible”.

During a virtual interaction with Chief Ministers, the Prime Minister pointed out that the Centre had urged the States to reduce taxes but several of them had not done so. Maharashtra, West Bengal, Telangana, Andhra Pradesh, Kerala, Jharkhand and Tamil Nadu for some reason or the other have not passed on, he added.

“We wanted prices of petroleum products to be reduced but the Prime Minister is asking the States to reduce the taxes. From where will we do that?” Ms Banerjee asked.