Kerala firm on decision not to reduce fuel tax

The Kerala government will not reduce the taxes on fuel due to the grim financial situation and said there was a natural proportionate decrease in the state tax with the Centre's tax cut due to the peculiarity of the tax structure, Addressing a press conference on Friday in Thiruvananthpuram  Finance Minister K N Balagopal reaffirmed that the Kerala has not increased the state-tax on petrol and diesel for the last six years and it had actually reduced it once. The minister further said that the state government has also launched several financial relief packages to those hit by COVID-19 and the recent disasters as well as increased the dearness allowance by 6 per cent, all of which may be affected if the taxes on fuel price is cut.

Explaining that the tax structures for petrol and diesel imposed by the Centre and the state were different, he said when the union government reduces its tax or the basic price of fuel, it would naturally reflect in the state tax as a proportionate decrease would happen there also. When the Centre reduces its tax by Rs 10 and Rs 5 for diesel and petrol respectively, it has actually been reduced by Rs 12.30 and Rs 6.56 in Kerala, he said. The Centre had increased the tax by over Rs 31 in the last seven years and has reduced only Rs 10 and Rs 5 from this now, he pointed out.Criticising the Congress-led UDF opposition which demanded the tax cut, Balagopal said the previous Oommen Chandy government had increased the tax 13 times.But, after the Pinarayi Vijayan government came to power in the state in 2016, the state has not increased the fuel tax so far, he added.