Business

Nirmala Sitharaman urges states to reduce VAT on fuel after cutting excise duty

May 21, 2022
Bharat Times

Finance Minister Nirmala Sitharaman announced big economic decisions on Saturday

Days after a war of words broke out between the central government and states after Prime Minister Narendra Modi requested them to reduce Value Added Tax (VAT) on fuel prices, Finance Minister Nirmala Sitharaman on Saturday cut excise duty on petrol. Announced and diesel at Rs 8 and Rs 6 per liter respectively.

Making the announcement through a series of tweets, the Finance Minister asked all state governments, especially those that had not reduced excise duty on November 4, 2021, to implement similar reductions and provide relief to the common man. called upon.

The Finance Minister’s request to the states to cut excise duty comes just weeks after Mr Modi’s similar call to non-BJP ruled states to reduce VAT on fuel prices, leading to a bitter tussle between him and the Centre. .

The non-Congress states had countered the Prime Minister’s request, alleging that it was the central government that was looting citizens by levying various types of taxes and cesses.

Meanwhile, Ms Sitharaman also announced that the government would give a subsidy of Rs 200 per cylinder for 12 cylinders in a year to the beneficiaries of the Ujjwala scheme, in order to reduce some of the burden arising from the rise in cooking gas rates to record levels. be able to help.

The cost of a 14.2 kg LPG cylinder in the national capital is Rs 1,003. The beneficiaries of Pradhan Mantri Ujjwala Yojana, poor women who have got free connections, will get a subsidy of Rs 200 directly into their bank accounts and the effective price for them will be Rs 803 per 14.2 kg cylinder.

Excise duty cut by Rs 5 on petrol and Rs 10 on diesel with effect from November 4, 2021 Taxes on petrol and diesel increased by Rs 13 per liter and Rs 16 per liter effective between March 2020 and May 2020 takes it back. consumers to avoid the sharp drop in international oil prices at that time.

The 2020 excise duty hike had taken central taxes on petrol to their highest level of Rs 32.9 per liter and on diesel by Rs 31.8 per litre.

After the latest excise duty cut, the incidence of central tax on petrol will come down to Rs 19.9 per liter and that on diesel to Rs 15.8 per litre.

Ms Sitharaman further announced that the government is reducing customs duty for iron and steel on raw materials and middlemen to reduce their prices.

He tweeted that import duty will be reduced on some steel raw materials and export duty will be imposed on some steel products.

The Finance Minister further informed that steps are being taken to improve the availability of cement through better logistics to reduce the cost.

Continuing with the big ticket announcements, the Finance Minister further informed that in addition to the fertilizer subsidy of Rs 1.05 lakh crore announced in the Union Budget, an additional amount of Rs 1.10 lakh crore is being provided to the farmers to take the lead.