PORVORIM: Reduction of the Value Added Tax (VAT) on fuel and LPG in the state will depend on the improvement in the state’s finances, said chief minister Pramod Sawant in a written statement to the House on Thursday.
Sawant, who also holds the finance portfolio, said that Goa government will try reducing the state’s share of VAT on fuel “whenever possible” but did not specify what criteria would be taken into account while considering the state’s financial situation.
A day earlier, Sawant admitted that the Covid-19 pandemic has hit the Goa’s economy and the state exchequer hard. With the state’s own tax revenue shrinking and the Centre yet to completely clear Goa’s dues under the GST compensation mechanism, the Sawant-led government is desperately trying to shore up its coffers by keeping taxes on fuel on the higher side.
“Government will try reducing state’s share of VAT imposed on petrol and petroleum products, whenever possible,” said Sawant. “It will depend on the receipt and expenditure scenario at relevant point of time.” In February, the BJP government hiked the VAT on petrol to 27% and on diesel to 23%.
According to data tabled in the recently-concluded winter assembly session, Goa earned just Rs 625 crore in 2020-21 (till December) against Rs 1,124 crore in 2019-20. While presenting his budget last year, Sawant had estimated VAT collections at Rs 1,220 crore. Goa’s public debt is expected to touch Rs 17,962.24 crore by March end this year.
In the last 10 days, petrol prices in Goa have been fluctuating between Rs 88.27 and Rs 89.15. State-run fuel retailers reduced fuel prices for the first time in over a year as crude oil prices tumbled. Petrol was cheaper by 18 paise and diesel by 17 paise per litre.
Data from the Centre puts Goa’s annual consumption of petrol and diesel at around 184 TMT and 316 TMT, respectively.