Acche din! Gujarat becomes first state to reduce 4% VAT on prices of petrol, diesel

Gandhinagar, October 10: The state government brings acche din for all the common people of Gujarat by slashing the prices of petrol and diesel. Notably, giving a major relief to all the peoples of Gujarat, the state government announced a whopping 4 percent reduction in a VAT (Value Added Tax) on petrol and diesel. 

Gujarat Chief Minister Vijay Rupani announced of reducing VAT on fuel by 4%. He said the prices of petrol and diesel will now come down by Rs 2.93 and Rs 2.72 respectively. The revised prices of petrol and diesel will come into effect from the midnight of Tuesday and Wednesday.

However, the decision from Gujarat government came after the Centre had cut excise duty by Rs 2 per litre and urged all the states to cut sales tax or VAT on petrol and diesel by 5 percent to provide further relief to consumers. As a result of the excise duty reduction from centre, petrol price was cut by Rs 2.5 per litre and diesel by Rs 2.25.

On October 5, Oil Minister Dharmendra Pradhan said, “We have proactively cut excise duty. Now it is the turn of states to reduce VAT.” Pradhan said that the Centre has sacrificed Rs 26,000 crore in revenue in the cut in excise duty. “States are the biggest beneficiary. They get all of the VAT collection plus they also get 42 percent of the central excise collections. The amount remaining with the Centre is used to finance centrally sponsored schemes in states,” he added.

Interestingly, States impose VAT ranging from 26 percent to 38 percent on prices of fuels. On the other side, 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 instead. Kerala government too had refused to slash VAT on fuel.