The Tamil Nadu Government has reduced sales tax on petrol to 27 per cent from the prevailing 30 per cent, according to an official press release.
Following the hike in petrol prices, the State Government has announced the reduction as a measure of relief to consumers. This will help bring down petrol prices by Rs 1.38 a litre. The reduction comes into immediate effect making it one of the lowest taxes in the Southern States.
Tamil Nadu faces a revenue loss of Rs 210 crore a year.
The release points out that since 2006 the State Government has brought down sales tax on diesel from 25 per cent to 23.43 per cent in 2006 and two years later further reduced it to 21.43 per cent in 2008 when the oil companies had announced increases in diesel prices.
A litre of petrol now retails at about Rs 63.38 in Chennai and diesel at Rs 40.16.