CHENNAI: Former union finance minister P Chidambaram has rushed to the defense of states and questioned the Union government’s demand to the states to slash their share of tax on petrol and diesel.
Taking to Twitter to criticise the BJP-led Centre on the issue, Chidambaram said, “The states are getting very little by way of share of duties on petrol and diesel. Their revenue is from VAT on petrol and diesel. I wonder if they can afford to give up that revenue unless the Centre devolved more funds or gave them more grants.” He also described the predicament of the states, which are facing demand from Opposition parties to reduce VAT on petrol and diesel, as “being between the devil and deep sea.”
Seeking to correct his earlier critique of Union Finance Minister Nirmala Sitharaman, Chidambaram tweeted, “The notification on reduction of duty on petrol and diesel is now available. FM used the words ‘Excise Duty,’ but the reduction is in additional excise duty which is not shared with the states.”
“Hence, contrary to what I said yesterday, the entire burden of the reduction falls on the Centre. To that extent, I stand corrected,” Chidambaram added, defending the states shortly after Tamil Nadu Finance Minister Palanivel Thiaga Rajan justified how the excise duty cut announced by the Centre also included a component of the states.