Finance minister T M Thomas Isaac wants cap on fuel excise revenue

THIRUVANANTHAPURAM: Finance minister T M Thomas Isaac on Tuesday suggested capping the excise revenue of petroleum products at the current level to arrest and roll back the price hike.
The minister’s suggestion on the microblogging site, Twitter, was contrary to his earlier stance, but came even as the price of petrol touched a record Rs 81 a litre in the state capital, where diesel was retailing at Rs 73.88/litre on Tuesday.
Isaac, so far, has been refusing tax breather. He was of the view that the government was not willing to bring down the fuel prices by slashing the percentage of sales tax levied and thus sacrificing an additional revenue to the state exchequer.
“Asking the state to reduce the price by avoiding its share of taxes while the Centre is increasing the duty without any rationale is completely illogical. The state tax will automatically reduce when the Centre reduces its share of taxes, because, for the state, its share comes as a percentage of the sale, while the Centre imposes its tax on per litre basis”, he had said earlier.
On Tuesday, however, Isaac changed his view. “Relentless rise in petroleum prices continues. Unless powerful national protest movement develops, the central government will not roll back the hike in tax. As a prelude to such movement, the states should consider capping petroleum tax revenue at the present level,” he tweeted.
When asked about the tweet, Isaac, now campaigning in Chengannur, said a decision would be made to arrest the price soon after the bypoll.
“Non-BJP ruled states will arrive at a consensus. Kerala will moot the proposal and I hope everyone will agree to it. We don’t need to wait for Centre’s mercy. We will do whatever we can do to help the people”, he said.
Meanwhile, Congress leader and former minister K C Joseph flayed Isaac for giving “meaningless” advices.
“Why capping at the present level, Dr Isaac? Why can’t you cap it at the April1, 2016 level? Why can’t Kerala show the way? Mere advice is meaningless,’’ Joseph said in reply to the finance minister’s tweet.
Isaac was also a staunch opponent of including petrol and diesel under the Goods and Service Tax (GST) regime, since it would earn Kerala a sizeable amount annually in sales tax and excise duty. The minister has now taken a U-turn.
“If the central government is serious about bringing petroleum products under GST, let them make a serious proposal. Let them commit to a programme for compensating the states for the loss of revenue, according to the Compensation Act. Without such firm commitment, all talk of GST is woolly,’’ Isaac tweeted.