Bhopal (Madhya Pradesh): Chief minister Shivraj Singh Chouhan announced a reduction in value added tax (VAT) on petrol and diesel on Thursday within 24 hours of the Centre cutting the excise duty on the petroleum products. Several other BJP and NDA ruled states too have followed the suit after the Centre’s appeal to all the states to slash VAT on petrol and diesel.
Other states which have announced reduction in VAT on petrol and diesel include Uttar Pradesh, Bihar, Gujarat, Uttrakhand, Haryana, Karnataka, Goa, Assam, Manipur, Tripura and Sikkim. BJP ruled Himachal Pradesh too announced on Wednesday a notification soon to reduce the VAT.
Thanking Prime Minister Narendra Modi for his decision to cut the excise duty by Rs 5 per litre on petrol and Rs 10 per litre on diesel Madhya Pradesh chief minister Shivraj Singh Chouhan said, “We have decided to reduce the rate (VAT) to reduce the prices of petrol and diesel further, which will be effective from Deepawali day today.”
However, the CM didn’t announce the percentage of VAT to be reduced.
According to Ajay Singh, president, MP Petroleum Dealers Association, after the Centre’s excise cut the petrol price was reduced by Rs 6.27 per litre and diesel by Rs 12.49 per litre in the state capital Bhopal which saw petrol price on Thursday at Rs 112.54 per litre and Diesel at Rs 95.39 per litre.
Ajay Singh said, “The amount of reduction in VAT on petrol and diesel as announced by chief minister Shivraj Singh Chouhan is yet to be known. This may be clear by the evening today, hence it is yet to be reflected in the prices of petrol and diesel.”
As per a written reply to a question in Lok Sabha in July this year from minister for Petroleum and Natural Gas Hardeep Singh Puri Madhya Pradesh has levied highest VAT on petrol (Rs 31.55 a litre) while Congress ruled Rajasthan has highest tax on diesel (Rs 21.82 a litre) among the states.
As per the minister’s reply the excise duty/cess collected by the Centre through sale of petrol stood at Rs 101598 crore and from diesel at Rs 233296 crore in 2020-21.
As per a news agency report, the Centre's excise duty cut on petrol, diesel will cost the exchequer approximately Rs 45,000 cr annually.
While spiralling petrol and diesel prices were cause of concern in public the Opposition launched an attack on Modi government at the Centre holding it responsible for the same. The central government’s decision to cut the excise duty came immediately after results of bypolls to 3 Lok Sabha and 29 state legislative assemblies constituencies held in 13 states and union territory of Dadra and Nagar Haveli. Though the ruling parties in most of the states dominated the bypolls, the BJP suffered a massive defeat in Himachal Pradesh which is ruled by it, conceding all the three assembly constituencies and one Lok Sabha seat to the Opposition Congress, which witnessed the bypolls.
After the defeat Himachal Pradesh chief minister Jai Ram Thakur blamed rising inflation as the reason behind the defeat.
In a scathing attack on the central government on the eve of the counting of votes held on November 2, Congress MP Rahul Gandhi posted a tweet, “Beware of pickpockets”. He also attached some figures with the tweet saying ‘As per CGA, excise tax collection in 2018-19 was Rs 2.3 lakh crore out of which Rs 35874 were distributed among states. Earlier, in 2017-18 Rs 71759 crore were distributed out of Rs 2.58 lakh crore’.
State Congress spokesperson Bhupendra Gupta said, “The Centre was already looting people. It had to cut the excise duty due to the bypolls results and Congress’ constant agitation on inflation and petrol and diesel price hike. Right now, we can’t comment on the Congress ruled states’ stand on reduction in VAT.”
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