After urging Prime Minister Narendra Modi to further slash the excise duty on fuel, Rajasthan Chief Minister Ashok Gehlot on Tuesday said the State Government would reduce the value added tax (VAT) on petrol and diesel to provide relief to the people. The scope for extending the relief was being examined, Mr. Gehlot said.
“When all States have taken action to reduce the fuel prices, we will have to follow suit...We will hold a meeting to take a decision on the reduction of VAT and make an announcement,” Mr. Gehlot said at a public meeting during the ‘Prashasan Gaon Ke Sang’ (administration with villages) campaign in Jodhpur.
Mr. Gehlot was being pressured to reduce fuel prices after the Congress-ruled Punjab cut down the price of petrol by ₹10 per litre and diesel by ₹5 per litre and claimed in an advertisement that its fuel prices were lower than those in Delhi, Haryana and Rajasthan. The Opposition BJP took up the issue and targeted the State Government for its stand.
Poonia writes to Sonia
BJP State president Satish Poonia even wrote to Congress president Sonia Gandhi on Tuesday, requesting her to instruct Mr. Gehlot to announce VAT reduction in the interest of people. The BJP also said that the State Government was charging the highest VAT on fuel in the country.
Mr. Gehlot had earlier said that the VAT collection of the States had automatically reduced in a proportionate manner after the Centre’s decision to cut the excise duty on petrol by ₹5 per litre and on diesel by ₹10 per litre. He has been pitching for a slash in the additional excise duty, special excise duty and cess on fuel.
Several BJP-ruled States have reduced VAT rates after the Centre’s move.
In a letter addressed to the Prime Minister on Monday, Mr. Gehlot had said if the Centre further reduced the excise duty by ₹10 on petrol and ₹15 on diesel, then the VAT would automatically reduce by ₹3.40 on petrol and ₹3.90 on diesel. As a result, Rajasthan was ready to bear a revenue loss of ₹3,500 crore, he said.
The Chief Minister also said that the Centre had reduced the States’ share in the excise duty on fuel after 2016 and the States were not getting any share from the additional or special excise duty charged by the Centre.
