After a recent meeting led by Karnataka Chief Minister Siddaramaiah involving various revenue-generating departments, the Congress government has announced an increase in sales tax on petrol and diesel within the state. This change has led to a rise of Rs 3 for petrol and Rs 3.5 for diesel.
In response to this move, the Opposition BJP has planned a statewide protest on Monday. Additionally, Union Heavy Industries and Steel Minister H D Kumaraswamy of the JD(S) stated that the hike was implemented to support the state government’s guarantee schemes.
The notification issued by the finance department on June 15 amended the Karnataka Sales Tax Act, resulting in an increase in sales tax rates. Specifically, the sales tax on petrol rose from 25.92% to 29.84%, and for diesel, it increased from 14.34% to 18.44%.
The opposition, represented by Leader of the Opposition R Ashoka, criticized the government by referencing Siddaramaiah’s previous speeches opposing fuel price hikes. Ashoka highlighted clips of Siddaramaiah’s criticism of such hikes and his promises to reduce fuel prices if Congress won the 2023 Assembly polls.
Responding to these criticisms, Siddaramaiah defended the decision, stating that Karnataka’s fuel taxes remained lower compared to most South Indian states and other states with similar economies, like Maharashtra.
Siddaramaiah further accused the previous BJP government of diverting Karnataka’s resources to other states. He mentioned that while the Centre increased its taxes, the state BJP government reduced VAT on petrol and diesel, leading to reduced revenue for Karnataka.
The government’s rationale for the fuel price hike is linked to the pressure faced by its five guarantee schemes, which has led to complaints from legislators about fund allocations for development work.
The decision to increase fuel prices came after a review meeting chaired by the chief minister on June 11, where tax collection in various departments was discussed. The government expects to generate around Rs 2,000 crore from this revision in the fiscal year.