Gujarat to Cut VAT on Petrol And Diesel After Pradhan's Appeal

  • Gujarat to Cut VAT on Petrol And Diesel After Pradhan's Appeal

Gujarat to Cut VAT on Petrol And Diesel After Pradhan's Appeal

"Any proposal in this regard is not with the department but being a BJP-ruled State the Government may go for it in the days to come", said Deputy Commissioner with Commercial Taxes Department Sheo Sahai Singh. A day after Centre reduced the excise duty on petrol and diesel by Rs 2 per litre, Pradhan said that a further reduction in Value-Added Tax will bring more relief to consumers. But consider this: the moneys they collect by taxing fuels is rarely being seen to be used for welfare schemes or infrastructure upgradation, whatever be the governments' contentions.

The excise cut effective Wednesday would cost the Centre Rs 13,000 crore in the second half of the current fiscal. "We have chose to meet KK Khandelwal (Principal Secretary of Commercials Taxes Department) on Monday to urge him in this regard", said Ashok Singh, president of Jharkhand Petroleum Dealers Association.

However, according to Moody's Investor Services this reduction in excise duty will have no impact on the profitability of the three oil marketing companies namely Indian Oil Corporation (IOC), Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroluem Corporation Limited (HPCL). "The Centre is just trying to put its responsibility on the shoulders of the state governments", he said.

Earlier, the excise duty on petrol was Rs 21.48 per litre ($52.5 per barrel) and on diesel was Rs 17.33 per litre ($ 42.4 per barrel) respectively. A break-up of this amount shows that the state governments got royalty on crude oil/gas (Rs 11,942 crore), sales tax/VAT (Rs 166,378 crore), octroi duties including electricity (Rs 3,524 crore), and entry tax/others (Rs 7,742 crore).

The Bharatiya Janata Party-ruled Maharashtra is all set to take a cue from the Union government and cut taxes on petrol and diesel.

Along with burning a hole in motorists' wallet, high fuel prices, more importantly, also drive up inflation across the board, hitting the populace and industry across the country.