West Bengal government has decided to reduce sales tax on petrol from 25 per cent to 20 per cent and diesel from 17 per cent to 12.5 per cent, state Finance Minister Asim Dasgupta said after a meeting with Chief Minister Buddhadev Bhattacharjee.
The Left front government with its 'limited financial power,' has decided to reduce sales tax rates on petrol and diesel, he said and urged the Centre to reconsider the price hike.
"With this reduction, the state government will incur a revenue loss of at least Rs 500 crore (Rs 5 billion)," he said.
To a question, the finance minister said sales tax on LPG had earlier been reduced from 12.5 per cent to 4 per cent, and it was not taken into consideration this time.
This move by the state's Left Front government comes in the wake of a highest ever price increase announced by the United Progressive Alliance government on Wednesday -- Rs 5 a litre for petrol and Rs 3 for diesel and Rs 50 per LPG cylinder.
The UPA government, however, spared the poor man's cooking medium kerosene from any increase.
Sharp reactions met the government's decision to enforce the single-steepest hike in fuel prices and it came under attack from opposition parties.
"The Left parties demand that the UPA government review the decision on the price hikes. It should cut excise duties more and impose windfall taxes on