Maharashtra: Dy CM Ajit Pawar defends VAT cut on petrol, diesel & natural gas says 'state to lose revenue of Rs 3,500 crore annually'

The government will lose revenue of Rs 2400 crore and another Rs 1100 crore following a cut in VAT on natural gas to 3% from 13.5% annually

Sanjay JogUpdated: Thursday, May 26, 2022, 08:35 PM IST
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Maharashtra Deputy CM Ajit Pawar | ANI

Unfazed by BJP's criticism the Deputy Chief Minister Chief Minister Ajit Pawar, who holds finance and planning departments, on Thursday strongly justified the state government's move to cut VAT by Rs 2.08 and Rs 1.44 per litre on petrol and diesel respectively saying that whatever was possible it did. The government will lose revenue of Rs 2400 crore and another Rs 1100 crore following a cut in VAT on natural gas to 3% from 13.5% annually. He argued that it is up to the states to decide which tax and how much should be levied.

Pawar mentioned that even though the state collects huge excise collection it gets peanuts from the Centre.

Pawar said Maharashtra contributed to the Centre in the form of taxes the excise it collected on the diesel. Maharashtra's excise collection on diesel in 2017-18 was Rs 33,479 crore, in 2018-19 Rs 35,282 crore, in 2019-20 Rs 37,349 crore, in 2020-21 Rs 30,432 crore. ‘’However, in return the state received Rs 427 crore in 2017-18 from the Centre, Rs 440 crore in 2018-19, Rs 435 crore in 2019-20 and R 383 crore in 2020-21. Similarly, Maharashtra’s excise collection on petrol was Rs 14,920 crore in 2017-18 of which state received Rs 129 crore, out of Rs 15,643 crore in 2018-19 only Rs 139 crore, out of Rs 16,134 crore in 2019-20 only Rs 147 crore and out of Rs 14,032 crore only Rs 138 crore,’’ he added.

Pawar said the Centre levies various taxes worth Rs 1.40 on petrol of which 59% goes to the Centre and 41 per cent to the state which is too inadequate.

Pawar’s response came after BJP termed the state government’s VAT cut on petrol and diesel ‘’absolute cheating.’’ Leader of Opposition Devendra Fadnavis claimed that 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.

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