New Delhi, June 16 (IANS) The Communist Party of India-Marxist (CPI-M) has alleged that central government's refusal to reduce taxes on petroleum products was due to its reluctance to "part with the windfall bonanza of extra revenues".
The CPI-M said the government's claim that a reduction in taxes on petroleum products would affect resource mobilisation was "completely tenuous".
"The central government earns a windfall bonanza of extra revenues, which it doesn't want to part with. Instead, it imposes burdens on the people to meet the deficit caused by the rise in the international prices," an editorial in party's weekly People's Democracy said.
The editorial pointed out that the taxes levied on petroleum products were ad valorem - proportionate to the price.
The CPI-M-led Left Front, which shores up Manmohan Singh's coalition government, conducted a nation-wide protest Tuesday against the government's decision to increase the prices of diesel by Rs.2 per litre and petrol by Rs.4 per litre.
The Communists also took a dig at the Congress-led state governments' move to cut sales tax in order to bring the petrol and diesel prices down. The editorial said the Left-ruled West Bengal imposed lesser sales tax than Congress-ruled Maharashtra and Andhra Pradesh states.
It also said the total tax revenue from oil sector last year was Rs.1,266 billion, out of which the government had received Rs.770 billion.
"All the states and union territories of India put together receive Rs.488 billion. Each state can reduce the extra revenue, but this amounts only to a miniscule amount. If the central government forewent its extra revenues, then the price hike would have been unnecessary," the article said.
The CPI-M reiterated that the party-ruled states would reduce sales tax only after the central government took such a step. "The day the central government reduces its taxes, on that very day, the CPI-M-led governments in West Bengal, Kerala and Tripura will do the same."
Responding to the Bharatiya Janata Party's assertion that the Left was doing "double speak" by continuing the support to the United Progressive Alliance coalition, the editorial said it was due to pressure from the Left that the government did not increase the prices further.
"The BJP, unable to stomach such reality, as is its wont, embarked on its familiar goebbelsian disinformation campaign. This, however, cannot cut any ice," the article said.