Nagaland Government revokes COVID-19 cess on petroleum products

Morung Express News
Kohima | September 23

Following the growing demands from various sections to abrogate the COVID-19 cess on petroleum products, the Nagaland Government on September 23 has decided to revoke the cess imposed since the last week of April. 

 “The Government has decided to revoke the COVID Cess on petroleum products,” informed a press release from the State Finance Department on Wednesday, following a State Cabinet meeting. 

A total of Rs 10.32 crore has been collected as COVID-19 cess from April to July, the release said, adding that the collection for the month of August is yet to be deposited. 

Nagaland government imposed COVID-19 cess of Rs 5 per litre on diesel and Rs 6 per litre on petrol and other motor spirits from midnight of April 28 to meet the financial exigencies arising out of the COVID-19.

"In exercise of powers conferred by sub section 3 of section 3A of the Nagaland (Sales of Petroleum and Petroleum Products including Motor Spirit and Lubricants) Taxation Act, 1967 (as amended), the Governor of Nagaland is pleased to notify that in addition to existing rate of tax and cess, the COVID-19 Cess shall be levied against Entry Serial Number 3 & 4 of Schedule II of the Act," a notification issued by the State Finance Department then informed.

Following the imposition, different organisations as well as opposition parties in the State had voiced out against the imposition but the State Government stuck to its decision. 

However, there were renewed calls to revoke the cess in September.  Among others, the Central Nagaland Students’ Association (CNSA) gave a 7-day ultimatum to the Nagaland Government to withdraw the cess on fuel on September 17.

 On September 19, the Dimapur Naga Students’ Union along with 12 constituent units also served a 4-day ultimatum starting September 20 to the Nagaland Chief Minister, demanding immediate roll back of the cess. 

Several other organisations endorsed the ultimatums. 

Consequently, the State Cabinet took the decision to revoke the cess on September 23.  

Dire financial situation 
Meanwhile, briefing the general public of the financial issues that are confronting the State, and the likely impact these will have on the activities of the Government, the Cabinet said that the current financial year is expected to close with a record deficit.

Some of the reasons given for the expected deficits were fall in monthly receipts as Share of Central Taxes and Duties from the Central government as well as decrease in State’s own revenues. 

Coupled with extra expenditure incurred for combating COVID-19, the Finance Department release implied that the deficit would surge further.

“The current year 2020-21 is expected to close with a deficit of Rs. 2358.81 crores as per budget estimates and this includes an increase of Rs. 939 crore since 2014-15,” it informed. 

Meanwhile, noting that negative impact of the pandemic has been so widespread and pervasive, it stated that the State Government has been compelled to adopt drastic measures to mitigate the negative effects of the fall in receipts to avoid a potential collapse. 

Some of these measures included pro rata cuts in the budgets of the departments, imposition of various austerity measures and mobilisation of additional resources through imposition of COVID-19 cess, it added.