Maharashtra govt may discuss VAT, fuel prices in cabinet meeting tomorrow
Premium- A senior minister said that Maharashtra's share in VAT on petrol is marginally higher than that of the Centre, and this issue would be discussed in the cabinet meeting
The Uddhav Thackeray-led Maharashtra government may discuss the twin issues of Value Added Tax (VAT) and fuel prices in the state cabinet meeting scheduled for tomorrow.
A senior minister said that Maharashtra's share in VAT on petrol is marginally higher than that of the Centre, and this issue would be discussed in the cabinet meeting, according to a PTI report.
Notably, during his virtual interaction with chief ministers of various states on Wednesday, Prime Minister Narendra Modi flagged higher fuel prices in many opposition-ruled states and urged them to reduce VAT in "national interest" to benefit the common man and work in the spirit of cooperative federalism in this time of global crisis.
The government rescheduled the state cabinet meeting, which was supposed to be held on Wednesday, to Thursday due to the PM's virtual interaction with the chief minister.
Thackeray's office issues statement
After the virtual meeting with PM Modi, CM Thackeray's office issued a statement detailing the Centre and the state government's share of taxes charged on fuel - mainly petrol and diesel.
The CMO stated that the Centre gets ₹24.38 on a litre of diesel sold in Mumbai, while the state receives ₹22.37. The same share of a litre of petrol sold in Mumbai is ₹31.58 and ₹32.55, respectively.
"It is not correct that prices of petrol and diesel are going up because of the state government's VAT," Thackeray stated.
The CM pointed out that Maharashtra's (VAT) share on petrol is 97 paise higher than the Centre.
“To match the Union government's tax share, Maharashtra may bring down VAT on fuel by 97 paise (per litre). However, such decisions have to be discussed in Cabinet meetings and the final approval comes from the chief minister. We may discuss the fuel price issue in the state cabinet meeting," the senior minister said.
He has asked his ministry's staff to include a note regarding the prices of petrol and diesel and the taxes imposed by the state and Union governments in the note for Thursday's cabinet meeting.
Maharashtra is a huge state in terms of the number of state employees and their salaries and pension are concerned. It takes a large share of the state's earnings just to pay the monthly salaries and pension, he said.
A state finance department official said that Maharashtra's annual earnings are ₹4 lakh crore of which ₹1.5 lakh crore are spent on paying salaries and pension of the state employees.
Around 14 lakh employees are working either in various departments of the Maharashtra government or in semi-state departments. According to the official, 7.50 lakh people get monthly pensions under the old pension scheme which also puts a huge burden on the state's finances.
Centre owes ₹26,500 cr to Maha
Meanwhile, Thackeray also said that the Centre owed ₹26,500 crore to the state, after the Prime Minister said some states did not reduce VAT on petrol and diesel despite the excise duty cut by the Union government in November last year.
Thackeray also accused the Centre of giving a step-motherly treatment to Maharashtra and that the state government was not responsible for the rise in prices of petrol and diesel.