Former Karnataka Chief Minister H.D. Kumaraswamy on Sunday said bringing petroleum products within the ambit of GST would be a death knell for the states.
In a series of tweets in Kannada, the JD(S) second- in-command opposed the attempts to include fuel in GST and appealed to Chief Minister B.S. Yediyurappa not to allow this to happen as it would dry the state's resources.
“The central government is systematically pushing petroleum products into the GST in the hope of lowering prices, using public outrage against the oil price hike as pretext. Subjecting petroleum products to GST would be a death knell for states,” the former chief minister said.
According to him, cess on petroleum products is one of the major sources of revenue for the states.
The central government levies excessive taxes and collects more revenue than the states. Now, it is the strategy of bringing petroleum into the GST and compromising the revenues of the states, he charged.
The former Chief Minister alleged that the centre has not yet provided the compensation that the states had to receive after the GST was approved, he said.
As thousands of crores have not been remitted by the centre, states have been begging for arrears, he added.
“Now, if the petroleum revenue is handed over to the centre, the states' plight will be miserable,” Kumaraswamy said.
According to him, the states will suffer hardships without income and without grants for development work, which would force them to either present a deficit budget or reduce the size of the budget.
The JD(S) leader said it would impede development.
The former chief minister said if the centre was concerned about oil prices, let it immediately reduce its tax and then direct the states to reduce taxes.
He said many states have already objected to petroleum products being brought under the ambit of GST, Kumaraswamy said Chief Minister Yediyurappa should also take up the issue with the Centre and lodge his opposition.
