PM Modi urges states to reduce VAT on petrol, diesel
Premium- During 22 March-6 April, petrol and diesel prices rose by a total of ₹10 per litre each. In the national capital, petrol is sold for ₹105.41 per litre, while diesel costs ₹96.67 per litre
NEW DELHI: Prime minister Narendra Modi on Wednesday urged state governments to lower value added tax (VAT) on petrol and diesel.
In a virtual meeting with chief ministers of states, the prime minister said that the Centre had lowered excise duties on the fuels in November last year and had also requested states to lower their taxes.
Domestic retail fuel prices have surged, with petrol selling for more than ₹100 a litre in many places, pushing up inflation and impacting households.
While Gujarat and Karnataka have lowered taxes, many are yet to do so.
“Many states like, Maharashtra, West Bengal, Telangana, Andhra Pradesh, Tamil Nadu, Kerala, Jharkhand did not agree to our request for some reason or the other, and the burden on the people of these states continued. I would not go into how much revenue these states gained during this period. But, now I am urging you that in the interest of the nation, please undertake what should have been done six months back in November. Give consumers in your state the benefit by lowering the VAT," Modi said.
The prime minister said Gujarat and Karnataka lost over ₹4,000 crore and ₹5,000 crore, respectively since November on account of lowering of taxes. Maharashtra, on the other hand, has collected an excess of ₹3,500 crore to ₹5,500 crore during the same period.
Last November, after the Centre’s decision to lower excise duty on petrol and diesel by ₹5 and ₹10 per litre, several BJP-ruled state governments, including Gujarat, Karnataka, Uttar Pradesh, Assam, Manipur, Haryana, and the NDA government in Bihar, had moved to cut taxes.
Citing the Russia-Ukraine conflict and its impact on global economy, Modi said, “I request to all states is that during the current global challenges, we should work as team in line with the ethos of cooperative federalism."
Global crude oil prices have largely been elevated since Russia invaded Ukraine on 24 February, which led to surge in domestic petrol and diesel prices.
During 22 March-6 April, petrol and diesel prices rose by a total of ₹10 per litre each. In the national capital, petrol is sold for ₹105.41 per litre, while diesel costs ₹96.67 per litre.
The BJP-led Union government has been facing for criticism over high fuel prices, and Centre has maintained that has been urging oil marketing companies to revise prices as per global rates, while states should lower VAT after Centre reduced excise duties in November.