Maharashtra: MVA, BJP square off on reduction in VAT on petrol and diesel

The state government’s announcement to reduce VAT on petrol by Rs 2.08 and on diesel by Rs 1.44 per litre in Maharashtra on Monday sparked fresh battle between the Maha Vikas Aghadi and BJP. The MVA partners including Shiv Sena, NCP and Congress strongly defended the government’s move while the finance department claimed it would lead to an annual revenue loss of Rs 2,500 crore by the state government. However, leader of opposition Devendra Fadnavis (BJP) on Monday termed it as "absolute cheating" and said the ruling dispensation in the state should immediately slash the fuel prices without "fooling the people" anymore.

The reduction in price as claimed by the state government is a natural result of the Centre's decision to cut down excise duty on fuel, he noted.

A statement issued by the state finance department said, ‘’VAT on petrol in Mumbai, Thane, Navi Mumbai, Amravati and Aurangabad was reduced to Rs 30.82 from Rs 32.90 per litre and on diesel to Rs 21.26 from Rs 22.70 per litre. In rest of Maharashtra, VAT on petrol was cut down to was cut down to Rs 30.80 from Rs 32.80 per litre and on diesel to Rs 19.63 from Rs 20.89 per litre.’’ The department asked all oil companies as well as petrol pumps owners and retailers should take note of this and levy tax accordingly.

Housing Minister and NCP leader Jitendra Awhad in a dig at Fadnavis said it was good that Fadnavis, who is the leader of opposition, is not speaking on Hanuman Chalisa but on petrol and diesel. ‘’Devendra Fadnavis is the Leader of the Opposition in the state. Better late than never, now Fadnavis is speaking on petrol, diesel and employment of poor,’’ he taunted.

However, Fadnavis claimed, ‘’What is done by MVA is just an 'April Fool' act in the month of May. We once again demand that MVA should immediately take a decision on reducing fuel prices & give relief to citizens, without fooling the people anymore."

‘’The state government recovers taxes on basic fuel price, commission given to dealers, road and infrastructure and agriculture and infrastructure development, said Fadnavis adding that "So, if the Centre cuts down tax on any of these, the state's tax reduces automatically."

Meanwhile, Ravi Shinde, ex-president of Petrol Dealers Association, Mumbai told the Free Press Journal, ‘’The reduction of price of petrol and diesel by the state government on account of VAT relief is a fallacy. Because VAT goes up and down with the price of petrol and diesel. Similarly, the price which has been reduced by the Centre due to cut in excise duty has resulted in automatic reduction of VAT in all the states including Maharashtra. But why state government is taking credit on account of VAT reduction is hilarious.’’ He said the relief which was expected from the state government would have come in the form of % of VAT which remains unchanged.

In Maharashtra, the state government charges 25% VAT which Rs 21.35 per litre on petrol and additional cess of Rs 10.12 per litre. On diesel, the state government charges 21% VAT which is Rs 16.86 per litre and additional cess of Rs 3 per litre.

Published on: Monday, May 23, 2022, 09:44 PM IST