Dear CM, reduce sales tax on petroleum

The prices of petrol, diesel and LPG have again been raised. While this unpopular move by the union government is being protested by the communists(that's the only thing they know) and the principal opposition party, BJP(looks like they think, opposition means to oppose everything), I am, like many other well informed people in the country, with the government this time. You just cannot subsidize petroleum to consumers and compensate the oil companies with oil bonds, especially when the oil companies do not have enough liquidity to buy crude oil from international market six months from now.

Now, will this move not hurt the common man, definitely it will and so the government should take steps to minimize the impact. This time, by government, I mean the ones at the states. Most of the governments have levied sales tax on petroleum products to the tune of 25-30%. Now, without taking into account other tax components, an increase of Rs 5 on petrol with 25% sales tax on its basic price will result in an effective increase of Rs. 5.61. Now this extra Rs 0.61 will go to the coffers of the state government. When the union government increased the prices to help out the oil companies, why should that result in increased sales tax collection. So, I believe that the state governments should, instead of blaming the centre for everything, get its act together and decrease the taxes so as to reduce the extra burden on the people.

So, Dear Chief Minister, can we have a moderate reduction in sales tax on petroleum??????

PS: While I wrote all this, the people whom I admire the least, the communists have reduced the sales tax in West Bengal and Kerala. Well done comrades, way to go. Other governments will do well to follow suit.