Centre challenges non-BJP states to cut Value-Added Tax on fuel
07 October, 2018, 12:27 | Author: Kristi Dunn
According to Telangana Petroleum Dealers Association, the fuel prices would come down by Rs 3 as the Centre had announced a cut in excise duty.
This year alone, petrol and diesel prices have been hiked by Rs 13.91 and Rs 15.59 respectively in the national capital. Meanwhile, in Mumbai, petrol prices saw a rise of 18 paise while diesel was hiked by 70 paise. The price of crude oil, which makes up nearly 90% of oil imports, is a major factor behind the final price of petrol and diesel in the country.
Petrol prices in Chennai were reduced to Rs 84.70 per litre and Rs 83.35 per litre in Kolkata.
The government of India has finally pitched in to cut down the prices of fuel in India by cutting the excise on petrol and diesel.
The government Thursday announced a Rs 2.50 a litre cut in petrol and diesel prices, factoring in excise duty reduction of Rs 1.50 per litre and asking oil companies to absorb another 1 rupee per litre. Several states, including Gujarat, Assam, Uttar Pradesh, Chattisgarh, Jammu and Kashmir, and other slashed prices by as much as Rs 2.5 on the same day, expanding the effective relief to customers to Rs 5.
Speaking on the reason for price cut, the Finance Minister said that there has been a significant impact of higher interest rates in the U.S. and crude oil prices on rising fuel prices in the country.
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The decision was announced by finance minister Arun Jaitley after he held a closed-door meeting with Prime Minister Narendra Modi and petroleum minister Dharmendra Pradhan.
Price cut in states like Gujarat and Maharashtra would be Rs 5 after they matched the announcement with a similar reduction in local sales tax or VAT rates.
Addressing mediapersons in New Delhi, Congress spokesman Randeep Singh Surjewala called the cut "a panic reaction in the face of public anger" ahead of assembly polls in four states.
The cuts will cost the Centre Rs 10,500 crore in tax revenues, he said.
"With this people will get the relief to the tune of Rs 5 per litre", he said.
Opposition-ruled States like Karnataka, Andhra Pradesh, West Bengal and Kerala had already reduced Value-Added Tax but Congress-ruled Punjab is yet to take a call.
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