State can’t afford fuels under GST, says Nitin Patel

Deputy chief minister and finance minister Nitin Patel on Friday said in the Gujarat assembly that if opposition wanted tax reduction on fuel, the centre should cut excise duty imposed on it. Patel said that petroleum products cannot be brought under the ambit of GST as the state would incur a huge loss. In another surprising statement, he said that farmers in Gujarat were not debt-ridden.

Patel was replying to issues raised by opposition members during a debate on cut motions in budgetary demands of finance department.

Before putting the budget demands for vote, Patel explained to Congress MLAs why GST on petroleum products was not in favour of the state. The Congress whip and MLA from Anklav Amit Chavda had sought reduction in taxes on fuels in the state which is levied at 20% VAT and 4% cess from consumers.

Patel said, “You have been making a ruckus that petroleum products should be brought under GST but you have no understanding of the issue. Gujarat will lose half of its tax collection to the Centre if petrol and diesel were brought under the GST. The state will have to give 50% of its total tax revenue on fuels... Thisis the reason why all states did not agree for petroluem products to be brought under GST,” he said.

The deputy CM also said that farmers in Gujarat were not debt-ridden as claimed by opposition members. “They take loans of Rs 20,000 crore every year. Around 95 per cent of them repay it in time. It shows that farmers are not reeling under debt. Instead of waiving loans, which is not an effective mechanism, our government is trying to increase their income by different schemes for them.”