Gujarat govt cuts Value-Added Tax on Petrol and Diesel by 4 percent

Vijay Rupani

Vijay Rupani

This after petrol price rose by Rs 7.8 since early July to reach over three-year high of Rs 70.88 a litre in Delhi while diesel rates had risen by Rs 5.7 to touch an all-time high of Rs 59.14.

The decision by the Devendra Fadnavis-led Maharashtra government comes days after Petroleaum Minister Dharmendra Pradhan urged states to reduce Value-Added Tax on fuel to bring down prices.

Earlier in the day, Gujarat government had chose to reduce the value added tax (VAT) on petrol and diesel by 4 per cent.

Vijay Rupani said Gujarat has become the first state to respond to the Centre's appeal to cut taxes on petrol and diesel. On this ground he had ruled out any reduction in the price of petrol and diesel.

Rupani's announcement came after the central government brought a reduction of Rs 2 on fuel rates.

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. "Once it is recalculated and reduced, the Value-Added Tax will automatically fall and people will be benefited", Nitish said.

Hours after the Gujarat government announced the tax cut, Devendra Fadnavis government also came out with tax reduction on fuel. He had also stressed that states must also bear a part of the impact.

If petrol and diesel prices would have been left unrestrained, BJP would have faced additional flak for contributing to a cheerless, inflation-marred Diwali. "We have proactively cut excise duty. The amount remaining with the Centre is used to finance centrally sponsored schemes in states". However, there lacks consensus among state governments in this regard.

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