Petrol price slashed by ₹5, diesel by ₹3

Following the decision, petrol prices will come down to ₹106.35 per litre and diesel to ₹94.28 per litre.

Mumbai In a major relief to the people, the Maharashtra government on Thursday decided to reduce VAT (Value Added Tax) on fuel prices. It has decided to slash VAT by ₹5 per litre on petrol and ₹3 per litre on diesel. Chief minister Eknath Shinde made the announcement after the state cabinet meeting. He said that the decision will give major relief to the people.

On Thursday, the fuel prices in Mumbai were ₹111.35 per litre for petrol and diesel at ₹97.28 per litre. Following the decision, petrol prices will come down to ₹106.35 per litre and diesel to ₹94.28 per litre (HT File)

On Thursday, the fuel prices in Mumbai were ₹111.35 per litre for petrol and diesel at ₹97.28 per litre. Following the decision, petrol prices will come down to ₹106.35 per litre and diesel to ₹94.28 per litre.

“After reducing the central excise duty on fuel prices, the prime minister had urged all the states to reduce their taxes on petrol and diesel to provide more relief to people. Though many states had slashed the prices, Maharashtra did not take the decision. Today, we have decided to bring down VAT by ₹5 per litre and ₹3 per litre on petrol and diesel respectively,” Shinde said.

The decision will also provide relief from inflation because it will help in reducing the transport cost of the goods, he added.

Reducing VAT on fuel prices will put a burden of ₹6,000 crore on the state exchequer. It imposes 26% VAT and ₹10.12 (as VAT) on petrol in Mumbai, Thane, Navi Mumbai and Aurangabad while for the rest of the state it imposes 25% VAT and ₹10.12 (as VAT) on petrol prices. For diesel, it imposes 24% VAT and ₹3 (as VAT) in Mumbai, Thane, Navi Mumbai and Aurangabad while for the rest of the state it imposes 21% VAT and ₹3 on diesel prices.

The erstwhile Uddhav Thackeray-led government had refused to reduce the fuel prices on the grounds that it will put a financial burden on the state coffers. Shinde said that they would plan their finances in such a way that it will not hamper the development projects.

Then finance minister Ajit Pawar said that the state would have to face around ₹250 crore every month if taxes are reduced on fuel prices and the state’s economy was not in a position to face further losses. Only BJP-ruled states have reduced taxes on fuel prices and that too when they received directives from their party high command.

On May 21, union finance minister Nirmala Sitharaman declared to reduce excise duty on petrol by ₹8 per litre and on diesel by ₹6 per litre to avoid an increase in fuel prices that were necessitated due to the surge in international oil prices. She also asked the states to reduce fuel prices.

Meanwhile, Shiv Sena welcomed the decision. “We welcome the decision if it provides relief to the common people,” said Sanjay Raut, Shiv Sena leader.