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Old 31st March 2012, 18:30   #46
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Default Re: Rumour : Karnataka to follow Goa Route. VAT on Petrol to be withdrawn?

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Originally Posted by samarjitdhar View Post
Note the revenue from petrol sales go even lower for Goa which is around 85 crores annually. Still remains in the thousands of crores for larger states.
OK, so "larger" states are reluctant to let go of valuable revenue and are not likely to do away with VAT on petrol. But instead of a 100% reduction in VAT on petrol, as in the case of Goa, could these "larger" states not have declared a 50% reduction in VAT on petrol? Some discount is better than no discount.

Having said that, there are other "smaller" states and union territories that could emulate Goa:

Arunachal Pradesh
Manipur
Meghalaya
Mizoram
Nagaland
Sikkim
Tripura
Chandigarh

Last edited by misquitas : 31st March 2012 at 18:32.
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Old 31st March 2012, 18:39   #47
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Default Re: Rumour : Karnataka to follow Goa Route. VAT on Petrol to be withdrawn?

As the thread title says, it is just a rumour & baseless one at that.
I heard this from the horse's mouth,
Yes, the CM, DVS himself confirmed that no reduction in VAT was planned when I met him during a public function yesterday, Infact his famous smile vanished for a second when he told me this.
I suggested maybe a Rs.5 cut could have the masses beaming with joy, but he just changed the topic to Udupi-Chikamaglur election debacle.
Quite understandable when we see the troubles he has been through while preparing this budget.
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Old 31st March 2012, 19:52   #48
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Default Re: Rumour : Karnataka to follow Goa Route. VAT on Petrol to be withdrawn?

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Originally Posted by misquitas View Post
OK, so "larger" states are reluctant to let go of valuable revenue and are not likely to do away with VAT on petrol. But instead of a 100% reduction in VAT on petrol, as in the case of Goa, could these "larger" states not have declared a 50% reduction in VAT on petrol? Some discount is better than no discount.
Something that political parties will only think of when its time for elections and this looks to be the only viable winning promise they can make.

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Originally Posted by misquitas View Post
Having said that, there are other "smaller" states and union territories that could emulate Goa:

Arunachal Pradesh
Manipur
Meghalaya
Mizoram
Nagaland
Sikkim
Tripura
Chandigarh
I would doubt that. Given the population density of these places, don't think folks in this places are miffed with the price of petrol. Chandigarh though is a UT so there are no election promises to be made or fulfilled.
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Old 1st April 2012, 00:33   #49
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Default Re: Rumour : Karnataka to follow Goa Route. VAT on Petrol to be withdrawn?

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Originally Posted by GSMINC View Post

I suggested maybe a Rs.5 cut could have the masses beaming with joy, but he just changed the topic to Udupi-Chikamaglur election debacle.
Haha! But yes, a 5 buck cut would make all the difference since removing VAT would be impossible!

April fool's day came slightly early for some people in Karnataka!
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Old 1st April 2012, 01:35   #50
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Default Re: Rumour : Karnataka to follow Goa Route. VAT on Petrol to be withdrawn?

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Haha! But yes, a 5 buck cut would make all the difference since removing VAT would be impossible!

April fool's day came slightly early for some people in Karnataka!
Trust me, a 5 buck cut would make a huge difference to the most heavily taxed citizens of this God forsaken state.
I am not a politician/party worker/deal maker, it's just that I offer a temple pooja service that is quite popular among politicians & they seek me out irrespective of party affiliation.
Since I move around in political circles & had recently gone through this thread, I just tossed around this idea/rumour at the Honourable CM, who reacted in a perfectly understandable way.
The opposition parties, Congress & JD(S) were certainly interested with the latter's state chief even contemplating this as a comeback strategy
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Old 1st April 2012, 20:12   #51
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Default Re: Rumour : Karnataka to follow Goa Route. VAT on Petrol to be withdrawn?

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Originally Posted by samarjitdhar View Post
I would doubt that. Given the population density of these places, don't think folks in this places are miffed with the price of petrol. Chandigarh though is a UT so there are no election promises to be made or fulfilled.
Why would you say that ? Those states may not be densely populated, but those people too would have a need for petrol to move about for work or leisure - population density won't change that, and I suppose compared to more industrialized states, the payscales aren't luxrious there either. As per the news, the political blockades in these states caused black market prices of petrol to hit INR 140 per litre. I'd be very miffed with that level of prices.

Karnataka and Maharashtra seem to be most highly taxed states, but a huge part of industry also comes mostly here, though TN , GJ and HR are finding much favour in the automotive sector. The cost of living in Mumbai , Bangalore and Pune is high as it is , so pay scales are somewhat (but not proportionately ) higher in these cities than other tier 2 cities. I imagine industry/commercial taxes are also high. Will it take an exodus of industry, which selects more welcoming states for the state governments to realize high taxes could eventually kill the golden goose ?

Why does the state government even have to tax fuel that much, don't they have other means of income, which states with lower taxes employ ? It's not like we're getting a great public transport or great civic amenities for the taxes collected.
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Old 1st April 2012, 20:22   #52
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Default Re: Rumour : Karnataka to follow Goa Route. VAT on Petrol to be withdrawn?

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Originally Posted by Ricci View Post
Why would you say that ? Those states may not be densely populated, but those people too would have a need for petrol to move about for work or leisure - population density won't change that, and I suppose compared to more industrialized states, the payscales aren't luxrious there either. As per the news, the political blockades in these states caused black market prices of petrol to hit INR 140 per litre. I'd be very miffed with that level of prices.
I would partially agree to that. Remember that most of these states rely on central dole and do not generate much revenue of their own. The people in these states do not travel great distances for their work as the states themselves are small and the population and businesses are located in very small areas so it is unlikely high petrol prices would hit them as hard.

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Originally Posted by Ricci View Post
Why does the state government even have to tax fuel that much, don't they have other means of income, which states with lower taxes employ ? It's not like we're getting a great public transport or great civic amenities for the taxes collected.
In my view the whole problem in India lies in an extremely poor umbrella of income tax collection. While there are a lot of people who are not covered under TDS but fulfill their tax obligations diligently and with a lot of integrity, I think there is even a much larger chunk of population who are either not paying taxes or underpaying it in various ways, no offense meant to any specific group of people. Add to that a lot of that money being siphoned off outside India to be hidden forever. As a result the central share of taxes is extremely low from which its only a minuscule amount being transferred to the states. So the states have no option but to impose heavy taxes on commodities of daily use like petrol. If taxation in India is standardized and collection made uniform, we could do much better and even find ways to lower our tax rates given the huge working population of the country.

Last edited by samarjitdhar : 1st April 2012 at 20:27.
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Old 1st April 2012, 20:27   #53
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Default Re: Rumour : Karnataka to follow Goa Route. VAT on Petrol to be withdrawn?

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Originally Posted by GSMINC View Post
As the thread title says, it is just a rumour & baseless one at that.
I heard this from the horse's mouth,
Yes, the CM, DVS himself confirmed that no reduction in VAT was planned when I met him during a public function yesterday, Infact his famous smile vanished for a second when he told me this.
With that note I think we can close this fantasy thread.
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