PM Narendra Modi on lip, Maharashtra CM Eknath Shinde says govt will cut VAT on fuel
During an emotional thanksgiving speech on the floor of the House after he won the trust vote, Shinde recalled PM Narendra Modi’s appeal to reduce state taxes after the Centre cut excise duty and said a decision to reduce VAT on fuel will be taken by his cabinet. Chittaranjan Tembhekar TNN
MUMBAI: Chief minister Eknath Shinde announced on Monday his administration will soon reduce VAT on petrol and diesel in the state. During an emotional thanksgiving speech on the floor of the House after he won the trust vote, Shinde recalled PM Narendra Modi’s appeal to reduce state taxes after the Centre cut excise duty and said a decision to reduce VAT on fuel will be taken by his cabinet “We will cut VAT on petroleum to provide relief to the people of Maharashtra.
When the central government comes with any state government, the speed of development increases multifold in that state. We will surely get benefit from Devendra Fadnavis’s experience,” said Shinde. The Centre reduced excise duty on two occasions – once during Diwali last November and again this May, when several states reduced their taxes in sync with the Centre. On May 22, after the central government reduced excise duty Rs 8 and Rs 6 per litre of petrol and diesel, respectively, the state government’s VAT, which is levied on ad valorem (according to value) basis, had automatically dropped by Rs 2.08 and Rs 1.44 per litre. In view of the high prices, the state government had been under pressure to give further relief from its own kitty.
The government had not relented, pointing out the Centre’s duty cut had slashed the state’s VAT revenue by Rs 80 crore per month for petrol and Rs 125 crore for diesel. “At present, the state recovers Rs 20.14 per litre as 26 per cent VAT and an additional Rs 10.12 per litre as cess, totalling Rs 30.26 per litre in Mumbai. The Centre recovers Rs 19.90 per litre as excise duty,” said petrol dealer and pricing expert Kedar Chandak. As far as diesel is concerned, the state recovers Rs 17.80 per litre as 24 per cent VAT and an additional Rs 3 as cess, totalling Rs 20.80 per litre. The Centre collects Rs 15.80 as excise duty.