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Sunday, June 8, 2008

Four states cut sales tax on fuel

Four states played good samaritan to people suffering from a hike in fuel prices by slashing taxes that made petroleum products a tad cheaper, even as the Prime Minister asked his colleagues to avoid foreign travel and cut back on spending.

Delhi, Bihar and Tamil Nadu today followed West Bengal''s example and announced cut in sales tax on fuel sales to cushion the impact of yesterday''s steep price hike on users.Congress President Sonia Gandhi and the BJP also separately asked chief ministers of states ruled by their respective parties to cut sales tax on petroleum products.

Petrol and diesel prices were yesterday hiked by Rs 5 and 3 a litre, respectively, and cooking gas by Rs 50 a cylinder, a decision that was marked by protests and shutdown in Left- ruled states of West Bengal, Kerala and Tripura today.Prime Minister Manmohan Singh, who appealed to states to forego a part of their revenues from petro products, today wrote to his colleagues, asking them to take austerity steps.

The appeal was followed by cut in sales tax on LPG by the Congress-ruled Delhi government, on diesel by DMK-ruled Tamil Nadu and on petrol and diesel by the NDA government in Bihar. The Left-ruled West Bengal government has already slashed sales tax on petrol and diesel by up to five per cent giving a relief of Rs 2.12 and Rs 1.38 a litre on the two fuels respectively. Uttar Pradesh Chief Minister Mayawati threatened to launch an agitation against the price hike, saying tax cut by states was not a permanent solution.