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Naik's formula: Tie aid to VAT

BS Corporate Bureau in Mumbai

The Centre is planning to take a tough stance if states do not comply with a uniform sales tax or agree to levy a value added tax on petroleum products, Union Petroleum Minister Ram Naik said in Mumbai on Monday.

Naik said the Union government should "proportionately lower the available aid to the states if they do not comply" with the decision to have uniform sales tax on petroleum products.

He added the petroleum ministry was discussing the issue of having a uniform sales tax on the petroleum products with the finance ministry and a decision would be taken by April 1, 2003.

"When the government has lowered prices of diesel or petrol by 50 paise a litre, some state governments took the same away by increasing sales tax proportionately," Naik added.

He said that Maharashtra has the highest sales tax with 34 per cent on diesel and 30 per cent on petrol.

The disproportionate sales tax has resulted in price of diesel and petrol varying to the extent of Rs 5 per litre in various states, especially between Mumbai and Delhi.

Naik acknowleged that petrol stations on the Maharashtra borders were losing business since tankers and trucks were filling their tanks in neighbouring states where sales taxes were lower.

Naik announced the setting up of an expert committee under joint secretary (gas) ministry of petroleum and natural gas to review pricing of gas supplied by Mahanagar Gas Ltd.

The minister met Patangrao Kadam, state minister for industries, Maharashtra, representatives of the "The Forum of Industrial Gas Consumers", Mumbai Grahak Panchayat, Mumbai Taxi Association, Mumbai Taximen Union and Mumbai Taxi Chalkak Malak Sena, Mumbai Autoriskchawmens union and Maharashtra Autorickshawmens Sharmik Sena, in Mumbai.

He has also asked the state government to constitute a high powered monitoring committee under the chairmanship of the Maharashtra chief secretary to review the infrastructure constraints and for co-ordination in the implementation of action plans of the oil marketing companies and MGL.

The minister also disclosed plans to increase CNG stations from the current 34 centres in Mumbai to 63 by June 2003. In short, it would translate into increasing CNG dispensing units from 111 to 240 in the same period.

In case of auto LPG, the dispensing stations would be increased from the present level of 11 to 23 by January 2003 and eventually to 32 LPG stations in 2004.

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