Many states consider cutting VAT on petrol, diesel after Centre cuts excise duty

Following Finance Minister Nirmala Sitharaman's call to provide further relief to consumers following the Centre's cut in excise duty, Kerala, Rajasthan, and Maharashtra have reduced VAT on petrol and diesel, though some other states have been hesitant, citing their inability to take on more revenue strain.

The Maharashtra government, backed by the Shiv Sena, reduced the VAT on petrol by Rs 2.08 per litre and diesel by Rs 1.44 per litre. According to a government statement, the state exchequer will suffer an annual loss of Rs 2,500 crore as a result of this decision. However, the DMK-led government in Tamil Nadu has stated that expecting states to lower their taxes is neither fair nor realistic.

Following the reduction in fuel prices by the Centre, Kerala's Left Democratic Front government has announced a reduction in state tax on petrol and diesel by Rs 2.41 and Rs 1.36 per litre, respectively.

Rajasthan Chief Minister Ashok Gehlot also announced that the state government will lower the VAT on petrol by Rs 2.48 per litre and diesel by Rs 1.16 per litre.

Basavaraj Bommai, the Chief Minister of BJP-ruled Karnataka, stated his government will consider more fuel tax cuts.

Sukhendu Sekhar Ray, a TMC national spokesperson, said on Sunday that West Bengal will lower fuel prices once the Centre clears its Rs 97,000 crore debt.

Announcing the duty slash through tweets, Finance Minister Nirmala  Sitharaman urged all state governments also to cut local sales tax or value added tax (VAT).

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