No more Tax on petrol and diesel in: Mana Telangana

Petrol and diesel are likely to be cheaper in Telangana with the TRS reportedly mulling reduction of sales tax on the automotive fuels by at least four per cent.

Sources said the TRS government is actively considering rolling back the tax hike it had imposed on the petroleum products in January. Senior officials in the commercial taxes department said the basic prices moving north were making a strong case for easing the tax burden on consumers.

"As the TRS government is trade-friendly, we are considering various measures to encourage growth. As far as reduction of tax on petrol and diesel is considered, there are discussions and the officials are dealing with the issue," said Telangana commercial taxes minister Talasani Srinivas Yadav.

While not willing to discuss the issue in detail, commercial taxes commissioner V Anil Kumar told TOI that a tax policy focusing on petrol and diesel was being worked out at the government level.

The Telangana petroleum dealers, in the meantime, said they were getting clear signals from the government that it would reduce sales tax on petrol and diesel by Rs 2 per liter or four per cent. "We have been given to understand that the Telangana government is working on a decision to roll back the sales tax hiked earlier this year. We expect some announcement in the first week of June," said Rajiv Amaram, joint secretary of Confederation of Indian Petroleum Dealers.

While a tax reduction would bring cheer in Telangana, it has raised hackles in Andhra Pradesh. The Telangana government's likely move comes when the AP government is under pressure to reduce tax on petrol and diesel, with the dealers in threatening to go on strike from June 3 if the tax is not cut.

While petrol and diesel are being sold at Rs 75.78 and Rs 60.18 per litre respectively in AP, the dealers are demanding reduction of the 8 per cent hike that the government had imposed in February. In Telangana, the prices of petrol and diesel are already relatively cheaper at Rs 74.73 and Rs 59.10 respectively.

Meanwhile, analysts said this could be another case of one-upmanship between Telangana and Andhra Pradesh with regard to popular decisions. "We saw this when AP and Telangana raced to announce pay hike for RTC employees. If the AP government announced 42 per cent fitment, Telangana went a step ahead to give 43 per cent fitment," said M V Rajeswar Rao, former secretary general, Federation of Andhra Pradesh Chamber of Commerce and Industries (Fapcci).

"It is surprising that the Telangana government is hinting at reducing tax rates on petrol and diesel when the dealers had not even asked for it. The move noticeably comes at a time when the dealers in AP are on a warpath," he added.

In fact, the commercial taxes commissioner admitted to not having got any request for a tax cut. "No representation has come to us with regard to altering the tax rates on petrol and diesel. In Telangana, these commodities are cheaper than in AP. Yet, if the government wants to bring down the tax rates, it can do it," Anil Kumar said.

However, the dealers in Telangana too are now eagerly looking forward to a tax cut. "The Telangana dealers will wait till June 3. If the government fails to announce the reduction, then the dealers may go on an indefinite strike," Rajiv Amaram said.