Mumbai, October 10: The VAT (Value Added Tax) on Petrol and Diesel price has been slashed by the Maharashtra government on Tuesday. The Petrol will be cheaper by Rs. 2 and Diesel price will be down by Re.1 after Gujarat government reduced the VAT by 4 percent on Tuesday morning.
VAT in Maharashtra is one among the highest in India with 32.04% VAT + Additional Surcharge on VAT - making Petrol Prices higher by Rs. 10 per Litre as against Petrol Prices in Capital, Delhi. On 10th October the Price of petrol in Mumbai is Rs. 77.58 and diesel are Rs. 60.55 but after cutting the VAT the new rate of petrol and diesel will be Rs. 75.58 and Rs. 59.55 respectively.
Earlier in the day, Gujarat Chief Minister Vijay Rupani announced reducing VAT on fuel by 4%. 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.
On October 5, Petroleum Minister Dharmendra Pradhan said that we have proactively cut excise duty. Now it is the turn of states to reduce VAT. States are the biggest beneficiary as 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.
States imposes VAT ranging from 26 percent to 38 percent on prices of fuels. Bihar Chief Minister Nitish Kumar refused to cut the VAT and asked to reduce the base prices of petroleum products instead. The Kerala government had also refused to slash VAT on fuel.