Oil minister Dharmendra Pradhan asks states to cut VAT on fuel by 5%
This comes a day after the Centre decided to reduce excise duty on petrol and diesel by Rs 2 to cushion the impact of rising crude oil prices.
Union Minister for Petroleum and Natural Gas Dharmendra Pradhan on Wednesday said his ministry has asked all state governments to cut the Value Added Tax – an additional state levy – on fuel by 5%. This comes a day after the Centre decided to reduce excise duty on petrol and diesel by Rs 2.
“We urge states to take responsibility just like the Centre did, in direction of consumer interest,” The Indian Express quoted Pradhan as saying. “If states slash Value Added Tax (on fuel) by 5%, consumers will get more relief.”
He said states were the ultimate beneficiaries of taxes on petrol and diesel. “They should share the responsibility of providing relief to consumers,” Pradhan said on Twitter.
Urge all states to reduce VAT by 5% in line with the cut in Central Excise Duty to provide farmers & consumers with one more slab of relief. pic.twitter.com/KdRcXd45RF
— Dharmendra Pradhan (@dpradhanbjp) October 4, 2017
On Tuesday, the government said the decision to cut excise duty will help cushion the impact of rising crude oil prices on retail petrol and diesel prices. The government, however, said it expected an added revenue loss of Rs 13,000 crore in the remaining financial year because of the reduction.
This is the first time the NDA government has reduced excise duty on petrol and diesel, after raising it 11 times since November 2014, according to The Indian Express.