Diwali bonanza: Petrol, diesel to cost less in Gujarat, Maharashtra

The Maharashtra government reduced petrol and diesel prices by Rs 2 and Rs 1 respectively

economy today : A week after Petroleum Minister Dharmendra Pradhan urged the state governments to cut the value added tax or VAT on petrol and diesel, two BJP-ruled states Gujarat and Maharashtra have today slashed the VAT on fuel.

The Gujarat government on Tuesday announced a 4 per cent cut in VAT on petrol and diesel, effective from midnight, to bring down fuel prices in the state.The Maharashtra government reduced petrol and diesel prices by Rs 2 and Rs 1 respectively.

Loss to Gujarat, Maharashtra

 

Slashing VAT would put a burden of Rs 2,316 crore a year on Gujarat’s exchequer. Gujarat annually earns Rs 12,000 crore by way of VAT on petrol and diesel.

 

Maharashtra, on the other hand, will lose an annual revenue loss of Rs 2,000 crore to the state exchequer.

 

Petrol, diesel price cut

 

Last week the finance ministry decided to cut excise duty Rs 2 per litre on both branded and unbranded petrol and diesel.

Terming it a ‘risk for the benefit of the people’, Dharmendra Pradhan told state to take up the responsibility and cut VAT on petrol and diesel by at least 5 per cent.

 

States’ VAT

States levy VAT in the range of 25-40 per cent on petrol and between 15-25 per cent on diesel. While Kerala had increased VAT on petrol to 34 per cent from 26 per cent, Mahrashtra had increased to 47 per cent from 27 per cent and Delhi to 27 per cent from 20 per cent with in a year. | Readmore…