Maharashtra announced a reduction in VAT on petrol by Rs 2.08 and on diesel by Rs 1.44 per litre. Rajasthan will cut VAT on petrol by Rs 2.48/litre.
A day after the Central Government decided to cut excise duty on petrol and diesel, Maharashtra, Rajasthan and Kerala on Sunday announced a reduction in VAT levied on these petroleum products. However, despite Union Finance Minister Nirmala Sitharaman's call to states to cut VAT, some state governments expressed their inability to do so, citing shortfall in revenue collection.
Fuel prices to be reduced in Maharashtra
The Maharashtra government announced a reduction in VAT on petrol by Rs 2.08 per litre and on diesel by Rs 1.44 per litre. The state government said in a statement that reducing VAT on petrol and diesel would result in an annual loss of Rs 2,500 crore to the state exchequer.
Read | Relief for common man: How FM's announcements will impact your finances
Rajasthan reduces VAT
Rajasthan Chief Minister Ashok Gehlot also announced that the state government will cut VAT on petrol by Rs 2.48 per litre and on diesel by Rs 1.16 per litre.
Kerala government reduces tax
Earlier, the Left Front government of Kerala announced to cut VAT on petroleum products. The Kerala government has decided to cut VAT on petrol by Rs 2.41 per litre and on diesel by Rs 1.36 per litre.
Tamil Nadu no tax cut
The Tamil Nadu government, however, rubbished the expectation of reduction in VAT, saying that the central government had never consulted the states while increasing the tax on petrol and diesel. State Finance Minister Palanivel Thiagarajan said that despite the reduction in central excise duty, the rates of petrol and diesel are still higher than in the year 2014.
Centre reduced excise duty on petrol, diesel
On Saturday, the Central government decided to cut the central excise duty on petrol and diesel. Excise duty on petrol has been cut by Rs 8 per litre and excise duty on diesel by Rs 6 per litre. Along with this, the Centre also called upon the state governments to cut the VAT at the local level to give more relief to the consumers.
After this, Maharashtra, Kerala and Rajasthan have announced reduction in VAT.
Citywise new rates of petrol, diesel
The excise duty cut will translate into a reduction of Rs 9.5 a litre on petrol in Delhi and Rs 7 a litre in diesel after taking into account its impact on other levies.
Petrol price in Delhi will now cost Rs 95.91 a litre as against Rs 105.41 a litre, while diesel will cost Rs 89.67 a litre as opposed to Rs 96.67 per litre.
In Mumbai, petrol will now cost Rs 111.35 a litre and diesel Rs 97.28. In Chennai, the petrol and diesel prices are Rs 102.65 and Rs 94.24 per litre respectively.
In Kolkata, the price of petrol is Rs 106.03 and diesel is Rs 92.76. In Bengaluru, one litre of petrol will cost Rs 101.94 and one litre of diesel will cost Rs 87.89.
Chidambaram targets Modi government
Former Finance Minister P Chidambaram and other opposition leaders said that the government's announcement of reduction in excise duty on Saturday evening will reduce the share of states in the central tax. However, later on Sunday, Chidambaram withdrew his statement, saying that the burden of reduction in tax would be borne by the Central government alone.
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 "Maharashtra, Rajasthan, Kerala reduces VAT on petrol and diesel")
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