Many Indian states slash VAT on fuel after central govt reduces excise duty
The Indian government on Wednesday reduced taxes on petrol and diesel in a bid to improve consumer sentiment
Several Indian states announced a further reduction of Rs7 per litre on Value Added Tax (VAT) on both petrol and diesel following the Indian government's reduced excise duty on fuel on Wednesday.
The Indian government reduced the excise duty on petrol by Rs5 and that on diesel by Rs10, to be effective from Thursday, reports the Indian Express.
India's tax relief on fuel comes on the eve of the festival of Diwali, which marks the beginning of a busy festive season in the country, typically marked by increased consumer spending.
Keep updated, follow The Business Standard's Google news channel
According to the Economic Times of India, diesel rates in India are revised on a daily basis. Diesel prices are revised at 06:00 am every day to make sure that even a minute's variation in global oil prices can be transmitted to fuel users and dealers.
The price of fuel includes excise duty, VAT, and dealer commission. VAT varies from state to state. After adding excise duty, dealer commission and VAT, the retail selling price of the petrol gets nearly doubled.
Various factors impact the price of fuel; including rupee to US dollar exchange rate, cost of crude oil, global cues and demand for fuel.
Here are the Indian states that have slashed VAT on fuel:
Goa
In a tweet late in the evening, Goa Chief Minister Pramod Sawant wrote, "The Modi Govt. has given a great Diwali gift to all Indians by announcing reduction in Excise Duty on Petrol and Diesel… In addition, Government of Goa shall reduce an additional Rs 7 on Petrol and Rs 7 on Diesel, thereby reducing the price of diesel by Rs 17 per litre and petrol by Rs12 per litre."
Assam
Assam announced a reduction in VAT on both the fuels by Rs7 per litre with immediate effect.
Himanta Biswa Sarma, the chief minister of Assam announced the state government's decision on Twitter.
"Heartening to learn Central Govt decision to reduce excise duty on petrol and diesel. In consonance with the decision of Honble PM @narendramodi, I am pleased to announce that Assam Govt will also reduce VAT on petrol and diesel each by Rs 7/- with immediate effect," he said.
On 29 October , Sarma had said his government was ready to cut its share of taxes on fuel if the high rates continue.
Gujarat
A statement from Gujarat Chief Minister Bhupendra Patel's office said the state government has decided to reduce the VAT on petrol/diesel by Rs7 per litre in the state following the Indian government's decision to reduce excise duty on it.
Tripura
Tripura Chief Minister Biplab Kumar Deb tweeted, "Following Hon'ble PM Shri @narendramodi Ji led central govt's decision on reduction of excise duty on petrol & diesel, #Tripura govt has also decided to reduce petrol & diesel cost by Rs 7 from tomorrow…After today's decision Petrol & Diesel will cost Rs 98.33/lt & Rs 85.63/lt respectively in Agartala."
Manipur
Announcing his government's decision, Manipur Chief Minister N Biren Singh tweeted, "Heartily welcome PM @narendramodi Ji's decision to reduce excise duty on petrol & diesel as a gift to the people of this Nation on this Diwali. I'm also please to announce that the Govt. of Manipur will also reduce VAT on petrol and diesel each by Rs 7/- with immediate effect."
Delhi
Petrol price on Thursday was cut by Rs6.07 per litre and diesel price by Rs11.75 in Delhi as oil companies passed on a record reduction in excise duty rates to consumers.
Karnataka
Chief Minister Basavaraj Bommai announced that his government was reducing the cost of petrol and diesel by Rs7 from Thursday evening.
"Even though it will mean a loss of Rs 2100 crore to our exchequer, it will bring down the prices for our citizens to 95.90 & 81.50 (Approx.) for Petrol and Diesel respectively," he tweeted.
Uttar Pradesh
The Uttar Pradesh government on Thursday said that the prices of diesel and petrol in the state will be reduced by Rs12 per litre each.
Haryana
The Haryana government has announced that it will decrease the prices of both petrol and diesel by Rs12 per litre.
