Bengaluru: Pressure on CM Basavaraj Bommai to cut tax on fuel as WFH set to end | Bengaluru News – Times of India

BENGALURU: Many companies are mounting pressure on chief minister Basavaraj Bommai to reduce sales tax on petrol and diesel as skyrocketing fuel prices are hindering economic recovery post the pandemic.
The pressure to control fuel prices comes especially from mid-level companies which are planning to end work from home arrangement and call employees back to offices. Corporates say the rise in fuel prices has hindered the hybrid model — a combination of work from home and work from office — since a large section of employees are reportedly complaining about the surge in commutation cost.
“Large-scale IT and BT companies and MNCs are generally insulated from the problem since they have their own transport arrangements, but the cost of commuting is a big challenge for mid-level companies and startups,” said Biocon founder Kiran Mazumdar-Shaw. “This is especially true now, since employees are being called back to work from office which is seen as essential to the recovery process post the pandemic. It is necessary that the companies and the government work together to deal with fuel prices and resulting inflation.”
Exploring ways On Sunday, Bommai told reporters he is “exploring” ways to reduce the burden on economic sectors and on people in general. “We had reduced sales tax by Rs 7 last time and we will take necessary steps as we are keen on reducing the burden on people,” Bommai said. “State governments alone cannot reduce the prices of petrol and diesel. We need to see what the Centre would do in this regard as oil prices are linked to global factors.” The Karnataka government had reduced sales tax from 35% to 24% and 24% to 14.3% respectively on petrol and diesel in November following the Centre’s move to reduce excise duty on the products by Rs 5 and Rs 10 per litre.
As a result, prices of petrol and diesel in Karnataka dropped from Rs 113.9 to Rs 100.6 and from Rs 104.5 to Rs 85 respectively. These prices remained unchanged from November 4, 2021 till March 22 this year when they began moving up again. The upward revision coincided with the end of assembly elections in five states.
Over the past 18 days, prices have been hiked 14 times and a litre of petrol now costs Rs 111 and diesel retails at Rs 94.4. The reduction in price had, in fact, resulted in an increase in revenue for the government exchequer bedsides being a huge relief for common people. Lower prices saw an increase in consumption and the commercial tax department mopped up Rs 4,200 crore through the sales of petrol and diesel in January-March quarter.
This was Rs 500 crore higher than the quarterly average. Domain experts say the present situation warrants another round of tax cut. “The government should again explore similar measures,” said BT Manohar, taxation committee chairman, Federation of Karnataka Chambers of Commerce and Industries. He added: “Lower prices will act as a catalyst and push up the recovery rate across sectors which are reeling under high inflation. It will also boost consumption resulting in more revenue for the government.”

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Sagar Biswas

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