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Rajasthan BJP demands reduction in VAT on petrol, diesel
The Centre on Wednesday slashed the excise duties on petrol and diesel by ₹5 and ₹10 per litre respectively
Chief minister Ashok Gehlot-led Congress government in Rajasthan is facing pressure from all corners to reduce value-added tax (VAT) from petrol and diesel.
Despite the reduction in excise duty by the Central government, Rajasthan still is on top when it comes to the rate of petrol and diesel. In Jaipur, the price of per litre petrol is ₹111.10 and that of diesel is ₹95.71.
The state government has been suggesting the Centre reduces excise duty on fuel due to which the VAT collection of the states will automatically reduce.
The Centre on Wednesday slashed the excise duties on petrol and diesel by ₹5 and ₹10 per litre respectively.
“The reduction of excise duty on diesel-petrol by the Narendra Modi government has brought relief to the common man and traders but what Ashok Gehlot is saying is surprising that he has included VAT in the excise duty which is cheating with the public,” said Satish Poonia, state BJP chief.
Poonia demanded to reduce VAT on diesel and petrol to provide relief to people. Rajasthan has levied the highest VAT on fuel in the country.
Supporting the demand of the opposition, the petrol pump dealers too are asking the state government to lower the VAT at par with other neighbouring states.
President, Rajasthan Petrol Pump and Dealer association, Sunnet Bagai, said, during the previous (BJP) government, the VAT on diesel was 16% and 26% on petrol, which, in the last two years, has been increased to 26% and 36% respectively.
“The VAT percentage does not reduce with slashing of excise duty. Rajasthan government should reduce the VAT on diesel to 16% and 26% on petrol – at par with the neighbouring states. We are paying the highest price of petro-diesel in the country,” he said.
“The dealers and public are demanding a reduction in VAT as we are losing our revenue,” Bagai said.
Amid a demand to reduce VAT, chief minister Ashok Gehlot has suggested the centre to further reduce excise duty on fuel due to which the VAT collection of the states will automatically reduce.
“We have been continuously urging the central government to control and reduce the prices of petrol/diesel. Now, with the centre’s decision on November 4 to reduce the excise duty, the state’s VAT has also automatically been reduced by ₹1.8 per litre on petrol and ₹2.6 per litre on diesel which has caused an annual loss of ₹1,800 crore in revenue collection of the state,” said Gehlot.
He urged the GoI to restrict the oil companies from curbing the daily increase in the prices of petrol/diesel prices. else after Diwali or assembly elections of five states, the oil companies will increase the price and make the benefit of the relief given by the central and state government to zero.
Gehlot said that the central government has already reduced the share that all the state governments used to get from excise duty. He added, due to the situation of Covid-19, there has been a huge decline in the revenue of the states.
“About ₹5,963 crores of GST compensation of Rajasthan is yet to be paid by the central government,” he said.
He said that the state governments levy VAT on the revenue collected by the central government in the form of additional excise duty, special excise duty, and CESS from petrol, diesel, and gas. “In view of inflation, the central government should make further reduction due to which the VAT collection of the states will automatically reduce in the same proportion,” he suggested.
As with the announcement of reducing the price of petrol by ₹5 and diesel by ₹10, the revenue of the state of Rajasthan will be reduced by ₹1800 crore. During this year’s budget, due to the reduction of VAT by 2% by the state government, there has been a revenue loss of ₹1000 crores - thus the total revenue of ₹2800 crore will reduce, said Gehlot.
