Under pressure of guarantee schemes, Karnataka hikes sales tax on fuel

The Karnataka government has suddenly issued an order to increase the sales tax on petrol and diesel by Rs 3. It issued a state gazette on Saturday (June 15), saying the increase in the price of petrol and diesel in Karnataka will be effective immediately.

Step to revive finances

Government sources have said that development work in the state is progressing slowly due to the guarantee schemes, and this step has been taken to boost the state coffers.

The tax on petrol and diesel has apparently been hiked due to setbacks in revenue from other taxes, including excise tax and motor vehicle tax. Recently, after the Lok Sabha elections, Chief Minister Siddaramaiah held a detailed discussion with officials from the Tax Department and the Finance Department.

Hike per cent

Chief Minister Siddaramaiah himself is overseeing the finance department. According to a state government notification on Saturday, the tax on petrol has been increased from 25.92% to 29.84% and on diesel from 14.3% to 18.4% under the Karnataka Sales Tax Act. The notification issued by the state finance department stated that the price hike would be effective immediately.

Earlier, the BJP government in the state had raised the price of petrol and diesel to Rs 13.30 and Rs 19.40 per litre respectively to revive the economy during the COVID crisis. While petrol is currently selling at Rs 99.84 per litre in Bengaluru, diesel is selling at Rs 85.93 per litre.

Now, due to the Rs 3 increase, the price of petrol will rise to Rs 104-105. For the common man who is already suffering due to the price hike, this increase is like rubbing salt in the wound.

(This article originally appeared in The Federal Karnataka)