Rajasthan asks Center to further cut excise duty on fuel amid calls to reduce VAT

The CM said that the reduction in central excise duty will automatically reduce the VAT collection of the state.

Gehlot argued that state governments levy VAT on revenue collected by the central government from petrol, diesel and gas in the form of additional excise duty, special excise duty and cess.

The CM said on Twitter, ‘In view of inflation, the central government should cut further, due to which the VAT collection of the states will automatically reduce in the same proportion.

This comes amid a demand by the opposition BJP in the state from the Gehlot government to reduce VAT on two motor fuels. By how much did the central government cut excise duty earlier this week? ₹5 and 10 on petrol and diesel.

The Chief Minister of Rajasthan has said that after the Centre’s decision to reduce the excise duty, the state’s VAT has also been reduced automatically. ₹1.8 per liter on petrol and ₹2.6 per liter on diesel, causing annual loss ₹1,800 crore in the revenue collection of the state.

At the same time, the Chief Minister urged the Center to ask the oil companies to refrain from increasing the prices of petrol and diesel every day.

He said, otherwise after Diwali or assembly elections in five states, oil companies will increase the price and the benefit of the relief given by the central and state government will be nullified.

Gehlot said the central government has already reduced the share that all state governments used to get from excise duty. Even otherwise, the revenue of the states has come down drastically due to the Covid pandemic, he further argued.

“About this ₹Rajasthan’s GST compensation of Rs 5,963 crore is yet to be paid by the central government.

States that have not reduced VAT

The Petroleum Ministry on Friday said that 14 states and union territories have not reduced VAT so far.

The states include Maharashtra, National Capital Territory of Delhi, West Bengal, Tamil Nadu, Telangana, Andhra Pradesh, Kerala, Meghalaya, Andaman and Nicobar, Jharkhand, Odisha, Chhattisgarh, Punjab and Rajasthan.

On the other hand, the biggest reduction in petrol prices has been seen in the Union Territory of Ladakh, where the prices have come down. ₹13.43

After the change in duty, the most expensive petrol is being sold in Rajasthan ₹111.10 per liter (Jaipur), followed by Mumbai ( ₹109.98) and Andhra Pradesh ( ₹109.05). fuel is down ₹100-a-litre mark in most BJP ruled states except Karnataka ( ₹100.58), Bihar ( ₹105.90), Madhya Pradesh ( ₹107.23) and Ladakh ( ₹102.99).

Similarly, now the most expensive diesel is being sold in Rajasthan. ₹95.71 per liter (Jaipur), followed by Andhra Pradesh ( ₹95.18) and Mumbai ( ₹94.14).