Mah, Guj and Himachal cut VAT on petrol, diesel; call it ‘Diwali gift’

Source: The Hitavada      Date: 11 Oct 2017 09:25:27



MAHARASHTRA, Gujarat and Himachal Pradesh onTuesday announced cuts inValue Added Tax (VAT) on petrol and diesel, effective from midnight, to bring down fuel prices in the three states. While BJP-ruled Maharashtra and Gujarat announced a 4 per cent VAT cut, the Congress-ruled Himachal Pradesh cut VAT by 1 per cent. The net reduction in petrol and diesel prices will be around Rs 2.33 per litre and Rs 1.25 per litre respectively in Maharashtra, said All India Petrol Dealers Association spokesperson Ali Daruwala.

Petrol will be cheaper by Rs 2 and diesel by Re 1 per litre across Maharashtra from midnight on Tuesday after the State Government reduced the value-added tax (VAT) on the fuels. Making the announcement about VAT reduction on petrol and diesel on Tuesday, Finance Minister Sudhir Mungantiwar termed it as a ‘Diwali gift’ to people of the State. The revised rates will be applicable from midnight on Tuesday, he said. “The Chief Minister has approved a proposal to reduce the VAT on petrol and diesel by Rs 2 and Re 1 a litre, respectively.

This is our Diwali gift to the masses,” Mungantiwar told PTI. He said the decision will cause an annual revenue loss of Rs 2,000 crore to the State Exchequer. “The Government is ready to bear the additional financial burden despite Maharashtra’s economy not being in a good shape,” he said.

In a pre-Diwali bonanza for people of the poll-bound Gujarat, the State Government on Tuesday reduced the value added tax (VAT) on petrol and diesel by 4 per cent. The Opposition Congress cried foul, alleging that the step has been taken by the Government with an eye on the upcoming State poll and is a result of the pressure built up because of the response to Congress Vice-President Rahul Gandhi’s campaign tour in the State.“After the Central Government’s instructions , Gujarat has decided to reduce VAT on petrol and diesel by 4 per cent from today mid-night,” Chief Minister Vijay Rupani said at a press meet here. With this rate cut, the price of petrol will come down by Rs 2.93 and that of diesel by Rs 2.72 in the State, h e said.

The effective price of petrol in Gujarat from midnight on Tuesday will be Rs 67.53 per litre and that of dieselRs60.77perlitre,the Chief Minister said. The State earns around Rs 12,000 crore per annum throughVAT.Becauseofthe reduction in VAT, the State Government now stands to lose out Rs 2,316 cror e annually. The Gujarat Government earlier used to charge 24 per cent VAT onpetrolanddieselandan additional 4 per cent cess . Now, the effective VAT will be 20 per cent plus the 4 per cent cess .

The last time the State GovernmenthadhikedVAT onfuelwas inJanuary 2016 when the international crude prices were falling. “Wehavetakenthisdecision in the interest of the people. The decision should not be considered to have any links with the polls. This is only aimed at giving relief to the people and itis a permanent decision,” Rupani said. The lowering of tax in poll-boundGujaratfollows Union Finance Minister Arun Jaitley recently writ - ing to all State Governments, nudging them to reduce taxes on petrol and diesel.

Himachal Pradesh reduced the VAT by 1 percent.The decision was taken at a cabinet meeting chaired by Chief Minister Virbhadra Singh. Himachal charges 27 per cent VAT on petrol and 16 per cent on diesel. The Centre had recently brought down the excise duty on petrol and diesel by Rs 2 per litre. “The rate reduction has been done with an eye o n polls. They (Government) have come under pressur e after looking at the response Congress Vice President Rahul Gandhi has been getting during his campaign tour in Gujarat, ” Congress’ spokesperson Shaktisinh Gohil said.

Haryana Excise and Taxation Minister Captain Abhimanyusaidfuelprices in the state are lower than thatinneighbouringstates and Union Territor y Chandigarh. Talking to reportershere,Abhimanyu said the petrol price of Rs 67.91 per litre in Haryana is lower than Rs 73.30 per litre in Punjab;Rs68.49 per litreinChandigarh;Rs70.89 per litre in Uttar Pradesh, and Rs 70.9