For fuel pump owners and consumers using diesel run vehicles there is finally some relief as the state government on Friday cleared a proposal to slash sales tax on diesel by 8.5 per cent.
This will bring down diesel prices from the current Rs 39.10 per litre to Rs 35.88 in Mumbai, Navi Mumbai and Thane.
In the rest of the state, diesel will now be available at Rs 35.88 instead of the current Rs 38.32.
The new rates on fuel will be applicable from December 1.
There has been no slash in sales tax on petrol.
For consumers, the good news is that the slash in diesel cost is likely to prompt transporters to slash prices on essential commodities including vegetables and pulses.
Bombay Goods Transporters Association (BGTA) president Vijay Kumar Goyal said, "For a consignment inside Maharashtra transporters are currently charging Rs 15 per km for a nine tonne truck and this would be reduced to Rs 13 per km."
Goyal added that they would soon be meeting to announce the new rates.
However, petrol dealers association had asked for 20 per cent slash in sales tax.
For the state's finance department, the sop comes at the cost of revenue of Rs 485 crore for a year. The only hope for state finance department is to look forward to March 2007, when the department will present the new budget.
Finance Minister Jayant Patil has now in turn appealed to the Union Petroleum Minister Murli Deora to reduce fuel prices considering the prices have fallen internationally.
"Following the decision, the diesel prices will now be similar to those in neighbouring states and dealers will not lose business," said principal secretary (finance) Subodh Kumar.
Petrol dealers and transporters from Maharashtra have welcomed the state government's decision.
"We are very thankful to the government for accepting our demand. The most important thing is that finance minister Patil fulfilled his promise made to us two days back," said Maharashtra Patrol Dealers Association vice president Amarjit Singh. He added, "Now that diesel prices will come down, the prices of essential commodities will also be reduced to some extent as every thing is dependant on transportation cost."
Sales Tax slash
For Mumbai, Navi Mumbai and Thane–Sales tax slash from 33 per cent to 28 per cent. Besides, cancellation of Re 1 surcharge (translates to 3.5 per cent).
For the rest of Maharashtra–Sales tax slash from 30 per cent to 25 per cent.
Besides cancellation of Re 1 surcharge (translates to 3.5 per cent).