Rajasthan And Kerala Reduce VAT On Fuel After Centre Slashes Excise Duty On Petrol, Diesel

After the Union Government announced a reduction on excise duty in fuel prices, Kerala and Rajasthan have announced cuts in diesel and petrol prices.

New Delhi: The Kerala government on Saturday announced a cut in the state tax on the prices of petrol and diesel by Rs 2.41 and Rs 1.36, respectively. Similarly, the Rajasthan government has reduced the Value-added tax (VAT) on petrol by Rs 2.48 per litre and diesel by Rs 1.16 per litre. This move comes after the Union Government announced the reduction of the excise duty on petrol and diesel by Rs 8 per litre and Rs 6 per litre respectively. This will reduce the price of petrol by Rs 9.5 per litre and of diesel by Rs 7 per litre, said Union Finance Minister Nirmala Sitharaman.

She urged states to also reduce VAT on petroleum products to give relief to the common man, in a series of tweets made on May 21.

The Finance Minister Sitharaman said that the move will have a revenue implication of around Rs 1 lakh crore per year. The government further stated that a subsidy of Rs 200 per gas cylinder (upto 12 cylinders) to over 9 crore beneficiaries of Pradhan Mantri Ujjwala Yojana will be provided.

However, the Rajasthan Chief Minister Ashok Gehlot claimed the Centre had to reduce the excise duty under the pressure of the Congress party's public awareness campaign decided in the recently held Chintan Shivir. He further said in a series of tweets in Hindi, “in the last two months, the price of petrol and diesel had increased by about Rs 10 per litre. In such a situation, today's deduction appears to be just a formality”.

He also demanded that the central government should lower the petrol and diesel prices to the level during the UPA rule if the government wants to give relief to people in the true sense.

The government had similarly reduced excise duty on petrol and diesel in November last year on the eve of Diwali. It had reduced excise duty on petrol by Rs 5 a litre and on diesel by Rs 10 a litre, according to ANI.

The report further stated that the government data from earlier this week showed that the wholesale inflation in India surged to 15.08 per cent in April from 14.55 per cent in the previous month due to a sharp jump in the prices of fuel, metal, food and non-food articles and chemical products.