Petition against levy of cess on income tax to bail out indian oil companies

The soaring oil prices have put governments across the globe into a tight spot. Same is the situation faced by Govt of India. This petition is to oppose cess proposed by govt of India on income tax to make up for short fall in revenues of oil companies.

Background:

India follows an administrative or administered price mechanism for pricing petroleum products. The prices of petroleum products are not determined by market prices but by Govt. The idea was that poor people of the country should be isolated from price shocks happening in international crude markets. This has lead to a situation where diesel the fuel of farmers, kerosene the fuel of poor and LPG cooking Gas were heavily subsidized while petrol bein fuel of "rich"was relatively less subsidized. At times petrol cross subsidized other petroleum products. The present prices of petroleum products were fixed when crude was close to 65/70$ per barrel. With today's prices of crude, petroleum companies are said to be incurring a loss of Rs 600Cr per day. The experts and petroleum ministry had proposed to increase prices of petrol, diesel and LPG by Rs 17, 5 and 50 respectively. Govt with an eye on elections has decided to impose a cess on income tax instead of raising prices

Why we should oppose the cess

1. The direct incidence of the price rise should be on consumer of the product. When price is increased, those who consume will be hit. When cess is applied on income tax, all non tax payers, those who make lot of black money, big farmers, politicians will continue to consume but will not pay price for it and the small section of honest tax paying citizens will be disproportionately punished
2. Govt could have decreased duties on Petroleum products, but in Finance ministry worried about loosing its income has decided to funnel out people's hard earned money
2. Its sheer populist politics. With no end in sight to increase in crude oil price, what happens when crude goes to $200/barrel?
3. A rise in petroleum prices will make people aware of their real "cost"
4. At higher petroleum prices people will move from individual vehicles to public transport. This would decrease overall level of consumption of petroleum products
5. Higher petroleum prices will encourage automobile manufacturers to manufacture more fuel efficient vehicles. look for alternative fuels. This will in turn make the entire planet more clean n green.
6. Cess would effectively mean higher rate of taxation. Higher taxes means people will be discouraged from paying income tax.


Its important that we wake up and act now. Its high time that govt stops taking taxpayers for granted. Its high time we stop paying for largesse of successive govts and their vote bank politics.