Modi govt has increased devolution of taxes to states Hardeep Singh Puri | Economy & Policy News

The Narendra-Modi led government has increased the devolution of taxes to state governments contrary to claims by Karnataka Chief Minister S Siddaramaiah, Petroleum and Natural Gas Minister Hardeep Singh Puri said on Monday.

On Sunday, Karnataka became the first state to raise taxes on petrol and diesel after the General Elections 2024. The state’s sales tax on petrol was raised to 29.84 per cent, up from 25.92 per cent. For diesel, the tax was raised to 18.4 per cent, up from 14.3 per cent. Consequently, the prices of petrol have increased by Rs 3, while diesel is now dearer by Rs 3.02 in the southern state.

Speaking to reporters on Monday, Puri countered the charge, saying the Narendra Modi central government has devolved more taxes to the states than the UPA governments. “Between April 2004 and April 2014, the government devolved 32 per cent of the Centre’s taxes to the states. In our ten years, from April 2014 to April 2024, we devolved 42 per cent,” Puri stressed.

Karnataka Chief Minister Siddaramaiah on Sunday justified the petrol and diesel price hike in the state, highlighting the state’s ‘reduced revenue’, and said it would ensure funding for essential public services and development projects. He also pointed out that since 2014, the Centre increased the central excise duty to a maximum of Rs 32.98 per litre of petrol and Rs 31.83 per litre of diesel as of May 2020.

However, Puri pointed out the excise duty on petrol and diesel was cut by Rs 13 per litre and Rs 16 per litre, respectively, between November 2021 and May 2022. Currently, the central excise duty is Rs 19.9 per litre for petrol and Rs 15.8 per litre for diesel.

Puri also said non-BJP ruled states are not keen on having a discussion on including petrol and diesel under the ambit of the Goods and Services Tax (GST) regime.

First Published: Jun 17 2024 | 8:29 PM IST