Chennai: With prices of petrol and diesel touching record highs, the Tamil Nadu government on Monday hinted it may not cut the Value Added Tax (VAT) on these products, saying they form a key part of the state's own tax revenue (SOTR).
Fisheries Minister D Jayakumar said the state extends benefits and sops worth Rs 77,000 crore to various segments, with salary of government employees constituting 70 per cent of its expenditure.
"The own source of income for the state is primarily from petroleum products and liquor meant for human consumption ...these are revenue generating sources," he said.
Both petroleum products and liquor sales in the state are covered under the VAT regime.
"We have to give Rs 77,000 crore worth benefits and sops to many sections.. salary (of government employees) constitutes about 70 percent (expenditure)... when we give like this, where will the money come from?," he asked.
Jayakumar was responding to a question on possible VAT revision by the state government with fuel prices soaring to new heights.
Fuel rates touched a record high yesterday as oil PSUs passed on four weeks of relentless rise in international crude prices to consumers.