Maharashtra Budget 2021-22: No cut in VAT or cess on auto fuel

Contrary to expectations, the state government has not tweaked or cut VAT and cess on petrol and diesel but has maintained a status quo while passing the buck on the Centre.

Maharashtra Deputy Chief Minister Ajit Pawar in his annual budget for 2021-22 has not reduced VAT or additional cess charged on petrol and diesel but has maintained status quo. This is despite the Centre’s suggestions to state to cut VAT and cess in a bid to provide relief to the vehicle owners and people in general. However, Pawar has thereby put the ball in the Centre’s court expecting some relief in auto fuel prices.

Pawar has also hinted that the state government, which is passing through a major financial crisis, is not in a position to take any hit by tweaking or reducing VAT and cess on auto fuel.

The state government imposes 25 per cent VAT on petrol and 21 per cent on diesel per litre. In addition, it also recovers additional cess of Rs 10.20 per litre on petrol and Rs 3 per litre on diesel.

Pawar’s colleague and former finance minister Jayant Patil has justified the DCM’s decision not to make any changes in VAT or cess charged on auto fuel. ‘’The Centre is not providing any relief by reducing excise but expects states to cut VAT. This is not done. The Centre is mopping up additional resources but not passing to the states,’’ he noted.

However, leader of opposition Devendra Fadnavis attacked the Maha Vikas Aghadi government for not reducing VAT or cess on auto fuel. ‘’The state has no right to criticize the Centre as it has failed to provide relief to the people by cutting VAT or cess,’’ he viewed.

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Free Press Journal