Published: Thu, October 12, 2017
Worldwide | By Gretchen Simon

Maharashtra slashes Value-Added Tax, fuel gets cheaper

Maharashtra slashes Value-Added Tax, fuel gets cheaper

Dehradun, Oct 11 Uttarakhand Chief Minister Trivendra Singh Rawat today tweeted that his state has reduced Value-Added Tax and cess on petrol and diesel by 2 per cent each to give relief to people but later removed the message even as finance minister Prakash Pant clarified no such decision has been taken. Almost half the current price of petrol and diesel is attributable to taxes imposed by the Central and the state government. While in Gujarat it was lowered by 4%, Maharashtra cut the price on petrol and diesel by Rs 2 and Re 1 per litre. For instance in Belagavi - neighbouring state of Karnataka - the price of petrol was Rs 69.53 per litre and that of diesel was Rs 57.20 per litre on Wednesday. For diesel, the Value-Added Tax is 24% plus a Rs 2 surcharge per litre in these seven cities, and 21% plus Rs 2 per litre surcharge in other areas."The surcharge on petrol has been reduced to Rs 9 per litre while that on diesel will be brought down to Rs 1", explained an official from the state finance department. Maharashtra pockets Rs 7,300 crore from petrol taxes and Rs 10,500 crore from diesel taxes. This effectively means that Indian consumers are paying nearly the same for petrol and diesel when crude was at Dollars 110/barrel. Since June, the Oil Marketing Companies (OMCs) have been announcing daily revisions in fuel prices. The VAT component varies across cities and the percentage is decided by individual state governments. Concessions for industrialists to continue post-GST: The tax breaks, incentives and concessions granted to the industrialists have ended after the advent of the GST regime in the country. The State earns around Rs 12,000 crore per annum throughVAT.Becauseofthe reduction in VAT, the State Government now stands to lose out Rs 2,316 cror e annually. The lowering of tax in poll-boundGujaratfollows Union Finance Minister Arun Jaitley recently writ - ing to all State Governments, nudging them to reduce taxes on petrol and diesel.

In 2016-17, Maharashtra consumed 426.80 crore litres of petrol and 976.46 crore litres of diesel.

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Data of Indian Oil showed that on Wednesday - if compared with previous day, petrol prices were higher by 3 paisa in New Delhi at Rs 68.48 per litre, Kolkata at Rs 71.26 per litre and Chennai at Rs 70.96 per litre.

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