Rajasthan cuts VAT on petrol and diesel prices, new rates effective midnight

Earlier in November, in a significant decision, the Centre reduced excise duty on petrol and diesel to bring down the prices of the two petroleum products which had been seeing an upward trend
The decision to cut the VAT on petrol and diesel prices has cost the state government a loss of <span class='webrupee'>₹</span>3,500 crore in the annual revenue, the chief minister said.&nbsp;(File Photo)
The decision to cut the VAT on petrol and diesel prices has cost the state government a loss of 3,500 crore in the annual revenue, the chief minister said. (File Photo)
Updated on Nov 16, 2021 10:18 PM IST
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Written by Joydeep Bose | Edited by Avik Roy, New Delhi

Rajasthan chief minister Ashok Gehlot on Tuesday said that the state cabinet had decided to reduce the value-added tax (VAT) on petrol and diesel prices by 4 and 5, respectively. The new prices will be effective from the midnight of November 16, the chief minister added.

In a post from his official handle, Gehlot tweeted, “In the Cabinet meeting today, it was unanimously decided to reduce the rate of VAT on petrol/diesel. From 12 o'clock tonight, the rates will be reduced by 4 per liter for petrol and 5 per liter for diesel.”

The decision to cut the VAT on petrol and diesel prices has cost the state government a loss of 3,500 crore in the annual revenue, the chief minister added. “Due to this, the state government will incur a loss of 3,500 crore in annual revenue,” Gehlot said in a subsequent tweet.

Notably, in a significant decision this month, the Centre had reduced the excise duty on petrol and diesel to bring down the prices of the two petroleum products which had been seeing an upward trend. The relief, which came to the consumers on the eve of Diwali, said to them that the excise duty on petrol will come down by 5 and that on diesel by 10.

Earlier this week, the chief minister of Rajasthan had requested the Narendra Modi-led central government to further the cut on excise duty on petrol and diesel. Referring to the finance ministry's request to the states “to commensurately reduce” VAT on petrol and diesel to give relief to consumers, Gehlot had said, “We demand the central government to further cut petrol and diesel prices; if the Centre reduces fuel prices, then, it will be reduced in the states too.”

With Rajasthan, 26 states and Union territories have so far undertaken a commensurate reduction of VAT on petrol and diesel to give relief to consumers, according to estimates provided by the Union ministry of petroleum and natural gas last week.

As per ministry data, only 10 states and Union territories have not yet undertaken any reduction in VAT on petrol and diesel prices. These are – Maharashtra, NCT of Delhi, West Bengal, Tamil Nadu, Telangana, Andhra Pradesh, Kerala, Jharkhand, and Chhattisgarh.

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Wednesday, June 29, 2022