Gujarat follows Centre’s directive, cuts VAT on petrol and diesel by 4% | india-news | Hindustan Times
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Gujarat follows Centre’s directive, cuts VAT on petrol and diesel by 4%

The Centre has slashed excise duty on petrol and diesel by Rs 2 a litre to tame rising inflation and to shield consumers from the surging price of auto fuels

india Updated: Oct 10, 2017 11:06 IST
Gujarat chief minister Vijay Rupani.
Gujarat chief minister Vijay Rupani.(Reuters File Photo)

The Gujarat government has decided to reduce the value added tax (VAT) on petrol and diesel by 4%, state chief minister Vijay Rupani said on Tuesday.

The reduction in tax comes just before Diwali in the state, where the assembly polls are due around the year-end.

“After the central government’s instructions, Gujarat has decided to reduce VAT on petrol and diesel by 4 per cent from today mid-night,” Rupani said at a press meet here.

With this rate cut, the price of petrol will come down by Rs 2.93 and that of diesel by Rs 2.72 in the state, he said.

The effective price of petrol in Gujarat from mid-night today will be Rs 66.53 per litre and that of diesel Rs 60.77 per litre, the chief minister added.

Because of this move, the state government will suffer a loss of Rs 2,316 crore annually.

“But we have taken this decision in the interest of people,” Rupani said.

The lowering of tax in the poll-bound Gujarat follows Union finance minister Arun Jaitley recently writing to all state governments nudging them to reduce taxes on petrol and diesel.

The Centre had recently brought down excise duty on petrol and diesel by Rs 2 per litre.

A day later, Union petroleum minister Dharmendra Pradhan asked the states to slash the Value-Added Tax (VAT) on fuel by 5%.

“We urge the states to take the responsibility just like the Centre did, in direction of the consumer interest, so that they get more relief,” Pradhan said.

Madhya Pradesh chief minister Shivraj Singh Chouhan also said that the government would have a serious discussion on the topic, and quipped, “Wait for Diwali!”

However, the Kerala government, led by the Communist Party of India (Marxist) (CPM), objected to the directive, citing that the status is unfavourable to implement the move.