VAT: These states reduced the VAT on fuel after the Center’s excise duty reduction


NEW DELHI: Several states including Maharashtra and Rajasthan cut VAT on fuel a day after the Center cut excise duty by Rs 8 on petrol and Rs 6 on diesel.
The latest reduction brought the excise duty back to pre-pandemic level – rather lower by a few paise. As of March 1, 2020, excise duty stood at Rs 19.98 per liter on petrol and Rs 15.83 per liter on diesel. These will. That is now Rs 19.90 and Rs 15.80 per litre, respectively.
Finance Minister Nirmala Sitharaman has urged states to reduce VAT on petroleum products to relieve the common man and clarified that the entire cost of reducing excise duty on petrol and diesel is supported by the Center.
However, some states appeared reluctant, citing their inability to exert greater pressure on revenues.
After the excise cuts in November 2021, 25 states and UT had reduced VAT to provide additional reprieve for consumers battered by record retail prices. States ruled by non-NDA parties like Maharashtra, Andhra Pradesh and West Bengal did not.
Here are the states that reduced VAT on fuel after the Center’s excise tax reduction
The Maharashtra government led by Shiv Sena has cut VAT on petrol by Rs 2.08 per liter and diesel by Rs 1.44 per litre.
A statement released by the government said the Treasury will have to bear an annual loss of Rs 2,500 crore as a result of the decision.
After reducing the VAT on petrol and diesel, the monthly income from petrol will be reduced by Rs 80 crore, while those from diesel by Rs 125 crore.
The Kerala government has announced a cut in the tax on petrol and diesel prices by Rs 2.41 and Rs 1.36 respectively.
“Kerala government is announcing reduction in petrol and diesel tax by Rs 2.41 and Rs 1.36 respectively,” said the state finance minister, KN Balagopal.
The Rajasthan government has reduced Value Added Tax (VAT) on petrol by Rs 2.48 per liter and diesel by Rs 1.16 per litre.
Taking to Twitter, State Chief Minister Ashok Gehlot wrote, “Due to the reduction in petrol and diesel prices by the central government, the state government will reduce VAT Rs 2.48 per liter on petrol and Rs 1.16 per liter on diesel. With this, petrol will be cheaper by Rs 10.48 and diesel by Rs 7.16 per liter in the state.”
(With contributions from the agency)

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