TN decision on fuel likely today

But in Tamil Nadu, even as the people were expecting some kind of similar relief, the government remained tight-lipped stating that the Chief Minister was out of station and hence a decision could be taken only after his return to Chennai on Friday.

Speaking to DT Next, Law Minister C Ve Shanmugam said, “Only the Chief Minister can take a call on fuel price cut. As he is out of station, no decision could be taken immediately. However, the CM returns to Chennai from the party meeting at Tirupparankundram on Friday and will hold a meeting where a decision on the subject can be expected”.  

Even in the past month, when the fuel prices were continuously rising, the Tamil Nadu government remained adamant without reducing the VAT even when some neighbouring states announced a cut in tax on fuel. Despite calls from various parties, including the main Opposition DMK, the State stood firm in its decision passing the burden on the common man. However, after the Centre’s Thursday relief it appears that the TN government will be forced to offer some relief on the fuel front to the consumers.

But, the instant response to the Centre’s appeal to cut tax on fuel came from BJP-ruled states like Gujarat, Goa, Uttar Pradesh, Jammu and Kashmir, Haryana, Chhatishgarh, Madhya Pradesh, Himachal Pradesh, Assam, Uttarakhand, Arunachal Pradesh and Tripura as they announced a cut in VAT of up to Rs 2.5 per litre to effect a Rs 5 per litre reduction in pump rates. The price cuts would be effective from the intervening night of Thursday and Friday. 

The reduction in excise duty, only the second in four years of BJP-led NDA rule, will dent central government revenues by Rs 10,500 crore. Announcing the decision, Finance Minister Arun Jaitley asked the state governments to match the move with a similar reduction in sales tax or VAT, saying leaders who only tweet and indulge in lip sympathy over high prices will be put to test now.