Madhya Pradesh Chief Minister Shivraj Singh Chouhan on Friday said the state government had decided to cut the Value Added Tax on petrol and diesel prices, ANI reported. The state reduced the sales tax on diesel by 5%, and on petrol by 3%. The new prices will come into effect from midnight on Friday.
Madhya Pradesh becomes the fourth state after Gujarat, Maharashtra and Himachal Pradesh to slash Value Added Tax on fuel prices.
On October 3, the Centre had slashed the basic excise duty on petrol and diesel – both branded and unbranded – by Rs 2 per litre. The new prices came into effect from October 4.
The decision will help cushion the impact of rising crude oil prices on retail petrol and diesel prices, a government release had said. The government, however, expects an extra revenue loss of Rs 13,000 crore in the remaining financial year because of the reduction.
Since June 16, oil retailers Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum, which account for 90% of India’s refuelling stations, started revising petrol and diesel prices everyday to instantly reflect global rate changes.