New Delhi: Requesting the Central government to share the cess collection with the state governments, the YSRCP Rajya Sabha members said the Centre has reduced the taxes on petrol and diesel but collected it in the form of increased cess. YSRCP Parliamentary Party leader Vijayasai Reddy raised this issue while moving a motion in Rajya Sabha on Thursday.

Bringing to attention the woes of a common man due to the rise in fuel prices, the YSRCP member questioned the Centre’s justification of rising crude oil prices in the international market. The central taxes on petrol and diesel have tripled in the past 8 years of the BJP-led government at the Centre, he said.

The YSRCP leader added in 2014 consumers would pay Rs 9.48 paise as tax on a litre of petrol, which has now risen to Rs 27.90 paise. To give you brief stats, Rs 1.15 lakh crore was collected in taxes on petroleum products in the financial year 2014-15 and that amount has reached Rs 3.72 lakh crore for the financial year 2020-21. In other words, central taxes on petroleum products have increased by 223 per cent, said Vijayasai Reddy.

Centre shares with the states, only 2% of taxes it earns from petrol, forcing states to impose their own tax. Urged the Central Govt. to restructure the taxes on Petrol so that the costs are not transferred to the consumer. pic.twitter.com/5qr18cGuwR
— Vijayasai Reddy V (@VSReddy_MP) March 24, 2022

On the one hand, the central government has been raising taxes and cess on petroleum products and on the other appealing to the states on several occasions to reduce the VAT on petrol. Rajya Sabha MP further said the central government was ignoring the fact that it was giving only Rs 2 to the states out of every Rs 100 revenue in the form of tax on petrol. It is making huge collections in the form of cess to prevent the states from getting their share of the taxes levied on petrol. He said the central government had chosen this path as there was no need to give the states’ share from the divisible pool.

Sharing the details of cess levied on petroleum products rising from 56 per cent to 95 percent in the past five years, the YSRCP parliamentary party leader said it was inevitable that states would not impose VAT on petrol to make up for the declining revenue due to various reasons.

In this context, there is an urgent need to restructure taxes on petrol to reduce the burden on consumers. States should also be given an equal share in the taxes levied on petroleum products. Vijayasai Reddy has appealed to the Centre to take appropriate steps to reduce the taxes levied on petrol and to share the revenue collected in the form of cess with the states.