Gujarat became first to reduces 4% VAT on fuel amid fuel price row
On Tuesday, the state government of Gujarat declared a 4 percent reduction in VAT (Value Added Tax) on petrol and diesel. NowPoll- bound Gujarat became the first state to reduce VAT on fuel after the central government urged states to do so amid public anger on the hike in fuel prices.
After this decision, petrol will cheap by Rs 2.93 and diesel by Rs 2.72. The new prices will kick in from the midnight of Tuesday and Wednesday.
Earlier this month, the center had cut the excise duty on petrol and diesel by Rs 2. Oil Minister Dharmendra Pradhan had thereafter, asked the state governments to trim VAT on the fuel products by 5 percent, saying that states are the major beneficiaries of the revenues created from petrol and diesel.
"States are the biggest beneficiary. They get all of the VAT collection plus they also find 42 percent of the central excise collections. The amount remaining with the Centre is used to sponsorship centrally schemes in states," Pradhan said.
On the other hand, there are lacks of harmonies among state governments in this regard. On Monday Bihar Chief Minister Nitish Kumar threw the ball back in the Centre's court and asked it to reduce the base prices of petroleum products. "The base costs in Bihar are higher than those in neighboring Jharkhand. Once it is recalculated and shortened, the VAT will automatically go down and people will get benefited," Nitish said.
read also
Bigg Boss Season 11: Have a glance at some major movements from week 1
PM Modi: petroleum products may come under the GST
Ram Rahim Singh urges court, No money to pay fine
