Chennai, Jun 28 : Days after the Centre hiked the prices of LPG by Rs 50 per cylinder,Tamil Nadu government today cancelled a four per cent Value Added Tax on LPG, bringing down the price of a cylinder by about Rs 15 in the state. Chief Minister Jayalalithaa said the move would come into effect from July 1.
The price of a LPG cylinder, which is now being sold at Rs 404.40 will be revised to Rs 389.67, resulting in a reduction of Rs 14.73, she said in a government release here. She said the state would not levy VAT on LPG in future also.
The UPA government had hiked the price of diesel by Rs 3 a litre, kerosene Rs 2 a litre and cooking gas by Rs 50 a cylinder on June 24.
The move will result in a revenue loss of Rs 120 crore annually which will be borne by the state government, Jayalalithaa said.
With “no signs” of Centre announcing a rollback of the hike in fuel prices, the measure is something of a relief that the state government could do to protect the people from the price hike, Jayalalithaa said.
The latest fuel price hike, including that of diesel, and kerosene, will ‘undoubtedly' affect all sections of society, she said, adding, increase in prices of LPG cylinder has in particular caused hardship to women.
“The fact that the Centre, which is increasing the prices citing international trends and asking state governments to reduce VAT on fuel is funny.Not all domestic petroleum products are made of imported crude oil.Further,profit motives of oil companies, their administrative capabilities and expenses incurred also play a role in the fixing of prices,” she said.
But all these were not taken into account and the Centre was “shirking its responsibility,” by saying prices were being increased in relation with the international trends of imported crude.
“Instead of finding lasting solution to this issue, the Centre is advising state governments to reduce VAT which is not acceptable,” she said. PTI