Maharashtra reduces VAT on kerosene and diesel by 2%

The state cabinet on Wednesday decided to reduce the Value Added Tax (VAT) on diesel and kerosene by 2% to dilute the effect of the recent hike in prices at the Centre. Diesel will be cheaper by 72 paise per litre, and kerosene by 28 paise per litre in the state once the government issues a notification to this effect over the next few days.

Consumers will not get any relief regarding LPG prices as the government has refused to subsidise it further. “Other states levy 4-6 % VAT on gas cylinders, whereas in Maharashtra it is 0%. It is not possible for us to go beyond that,” chief minister Prithviraj Chavan said on Wednesday.

The sales tax on diesel has been reduced by 2% from the current 26% in Mumbai, Thane, Navi Mumbai, and the current 23% in the rest of the state. The sales tax on kerosene has been reduced by 2% from 5% in the state. This will result in additional burden of 416 crore on the state exchequer.