Tamil Nadu is unlikely to further reduce taxes on fuel. Indicating this, State Finance Minister Palanivel Thiaga Rajan on Sunday pointed out the reduction in excise duty on petrol and diesel announced by Finance Minister Nirmala Sitharaman on Saturday would result in an additional loss of around ₹800 crore in annual revenue for Tamil Nadu. Therefore, he argued, it was neither fair nor reasonable to expect States to reduce their taxes on fuel since the Union government never consulted the States when it increased the taxes multiple times.
In a statement, Mr. Thiaga Rajan said the tax cuts announced in November 2021 had caused an additional loss of about ₹1,050 crore in annual revenue to Tamil Nadu. The recent cut would put a huge strain on the finances of the State.
On Saturday, announcing a reduction in excise duty on fuel, Ms. Sitharaman had exhorted States to reduce VAT on fuel.
