Bengaluru, Jul 2: The diesel and petrol have become cheaper in Karnataka after the launch of GST as the chief minister Siddaramaiah led Congress government has abolished the entry tax.
From July 1, diesel in Karnataka becomes the cheapest in south India. The new GST regime has indirectly benefited motor vehicles users as the state government announced abolition of 5% entry tax. This, in turn, lowered fuel prices further by Rs 2.8 per litre on diesel and Rs 3 per litre on petrol.
As on July 1, diesel price was the lowest in Mangaluru -Rs 53.65 per litre in the entire state, but in Bengaluru the price was Rs 54.23 per litre (Rs 57.08 per litre on Friday). These figures for Saturday were lower than in Hyderabad, Mumbai, Chennai, Thiruvananthapuram, Panjim and Puducherry. The cost of petrol per litre was lowest in Mangaluru, Rs 63.64, and in Bengaluru it was Rs 64.24 per litre on Saturday.
The Re 1 rise in Bengaluru fuel prices compared to Mangaluru is due to transportation cost from refineries in Mangaluru.
On June 29, the state government decided to abolish entry tax on fuel and reduced the tax payable by a dealer under Section 5 of the Karnataka Sales Tax Act, 1957 (Act 25 of the Act) which is 19% on diesel. For petrol, the sales tax was slashed by 30% and aviation fuel by 28%.
BR Ravindranatha, presi dent, Akhila Karnataka Federation of Petroleum Dealers, told STOI, "GST is a different thing altogether but the impact will be different in different states when it comes to diesel and petrol prices. Entry tax has been abolished by Karnataka but in a couple of neighbouring states, it has not been abolished. That's why the price of motor fuel has reduced drastically in Karnataka. Also, diesel is now cheapest in Karnataka among the southern states."
The move by the state government is a calculated one as it is timed around GST. The move has removed 5% entry tax on petrol, aviation fuel, motor spirit and piped natural gas each of which attracts sales tax of 30%, 28%, 19% and 5.5% respectively. The government of Karnataka hereby reduces with effect from first day of July, 2017, the tax payable by a dealer under section 5 of the Karnataka Sales Tax Act, 1957," a special gazette notification of the finance secretariat dated June 29, 2017 states. This 'tax payable' is entry tax, points out the Karnataka State Federation of Petroleum Dealers (KSFPD).
Hannulal R Tiwari, IOCL dealer from Vijayapura and vice-president of the federation, lauded Siddaramaiah's move to remove entry tax on petroleum products. The price of diesel per litre in Karnataka is now less approximately by Rs 2.50 compared to Tamil Nadu, Rs 3.50 from Maharashtra, Rs 1.50 from Goa, Rs 6 from Andhra Pradesh and Rs 4 from Telangana. Likewise, there has also been appreciable reduction in price of petrol, he adds. However, the price is different in five cities in Karnataka. In Mysuru, the price of petrol slipped by Rs 3.30 per litre and diesel by Rs 2.70 per litre. A litre of petrol cost Rs 63.98 and diesel Rs 54 as on July 1.
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