Not a fact that fuel prices more expensive due to states: Uddhav Thackeray

Maharashtra Chief Minister Uddhav Thackeray on Wednesday refuted PM Narendra Modi's claims that the Opposition-ruled states have not reduced taxes on fuel and clarified that the fuel prices have not become more expensive due to the state tax.

Prime Minister Narendra Modi on Wednesday during the COVID-19 review meeting had asked Opposition-ruled states to reduce fuel taxes and said that a few states who could not reduce prices last November should do it now.

Thackeray clarified that the Maharashtra state government has already given tax relief for natural gas.

"Today, diesel tax share on a litre of diesel in Mumbai is Rs 24.38 for the Centre and Rs 22.37 for the state. Petrol tax share is Rs 31.58 as central tax and Rs 32.55 as state tax. Therefore, it's not a fact that the prices have become more expensive due to state tax," Uddhav Thackeray said in a statement.

He further added that the value-added tax had been reduced from 13.5 per cent to 3 per cent.

"To provide relief to the citizens of the state, the state government has already given tax relief in respect of natural gas. In order to promote the use of natural gas, the rate of VAT has been reduced from 13.5 per cent to 3 per cent," the statement said.

Prime Minister Narendra Modi was holding a review meeting with chief ministers and senior officials of states in the wake of the recent surge in coronavirus cases over the past two weeks. On the issue of rising fuel prices, he said that "I am not criticizing anyone but request Maharashtra, West Bengal, Telangana, Andhra Pradesh, Kerala, Jharkhand, Tamil Nadu to reduce VAT now and give benefits to people."

Modi pointed out that the Centre reduced the excise duty on fuel prices last November and also requested states to reduce tax. "States like Tamil Nadu, West Bengal, Telangana, Maharashtra, Kerala and Jharkhand did not reduce tax on fuel, and should do it now," he said.

The prime minister raised the issue of many states not adhering to the Centre's call for reducing the Value Added Tax (VAT) on petrol and diesel after his government slashed excise duties on them in November last, and called it an "injustice" to people living there and also harmful for neighbouring states.

He further gave the example of Karnataka and Gujarat, both ruled by the BJP, saying they have suffered a revenue loss of nearly Rs 5,000 crore and Rs 3,500-4,000 crore respectively by reducing VAT but they did so to help people.