Maharashtra cuts VAT on Petrol and Diesel prices a day after Centre reduces excise duty

After Kerala, Rajasthan and Odisha agreed to the centre's request and reduced Value Added Tax (VAT) on petrol and diesel, Maharashtra followed suit and reduced the VAT on the fuels - 2.08 per litre on Petrol and Rs 1.44 per litre on Diesel. The slashing of VAT will result in a loss of Rs 2,500 crore annually to the state's exchequer. The Shiv Sena-led Maharashtra government's move comes immediately after Chief Minister Uddhav Thackeray criticised the centre's move to reduce excise duty, stating that there was a steep rise in the central taxes on the fuels taken in the past and now they have just reducing the same. He also demanded that the prices of petrol and diesel be brought back to what they were 6-7 years back. 

The centre on May 21 announced a major cut in the excise duty on petrol and diesel, which reduced the prices of both the fuels - amounting to a reduction in the price of petrol to Rs 9.5 per litre and diesel by Rs 7 per litre. 

'Centre's excise duty reduction not enough': CM Uddhav Thackeray

The Maharashtra CM on May 21 after the centre's move seemed unsatisfactory with the quantum of excise duty reduction. He also demanded the prices of petrol and diesel should be reversed back to the levels they were priced 6-7 years ago. "Two months ago, the excise duty on petrol was hiked by Rs 18.42 per litre and today, it has been reduced by Rs 8, while the duty on diesel was increased by Rs 18.24 per litre and now it has been brought down by Rs 6. It is not good to make drastic hikes and then provide minimal reduction," the chief minister said. "A real relief would be to bring the excise duty down to what it was six or seven years ago," he added.

Earlier BJP Minister Hardeep Singh Puri welcomed the centre's reduction of the excise duty and said, "I want to highlight the fact despite this second reduction in central excise, price of petrol & diesel in states like Maharashtra, Rajasthan, West Bengal, Tamil Nadu, Andhra Pradesh, Jharkhand & Kerala remain around Rs 10-15 higher than in BJP-ruled states."

The prices of petrol-diesel differ in various states based on the local levy - VAT. The states of Andhra Pradesh, Rajasthan and BJP-ruled Madhya Pradesh.

IMAGE: PTI