Maharashtra govt to incur Rs 2,400 crore loss after VAT cut on petrol and diesel

Sanjay JogUpdated: Monday, May 23, 2022, 02:40 PM IST
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A day after the Centre reduced excise duty on fuel, the Maharashtra government on Sunday slashed the VAT on petrol by Rs 2.08 per litre and diesel by Rs 1.44 per litre.

Vat on petrol in Mumbai, Thane, Navi Mumbai, Amravati and Aurangabad was cut down to Rs 30.82 from Rs 32.90 per litre and VAT on diesel was cut down 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 32.80 from Rs 30.80 per litre and VAT on diesel was cut down to Rs 19.63 from Rs 20.89 per litre

Also for the rest of Maharashtra, from 21/05/2022, the value added tax on petrol will be 30 rupees 80 paise per liter instead of an average of 32 rupees 80 paise per liter. Also, the value added tax on diesel will be Rs 19 63 paise per liter instead of Rs 20 89 paise. All oil companies as well as petrol pumps and holders should take note of this and levy tax accordingly.


A statement issued by the government said the state exchequer will have to bear an annual loss of Rs 2,400 crore as a result of this decision.

The state government during the annual budget had estimated a mobilisation of almost Rs 44,000 crore through VAT on auto fuel in 2022-23.

Chief Minister’s Office in a statement said that during June 16,2020 and November 4, 2021 the Centre was charging a levy of Rs 7.69 per litre on petrol and Rs 15.14 per litre on diesel. Between March and May 2020, the Centre had increased excise duty by Rs 13 on petrol and Rs 16 per litre on diesel.

In Maharashtra, daily sale of diesel is 2.35 crore litre and 1.15 crore litre of petrol. 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. However, the state government has not mentioned whether the reduction was in VAT or in additional cess.

The Central government on Saturday announced a record Rs 8 per litre cut in excise duty on petrol and Rs 6 reduction on diesel.

Chief Minister Uddhav Thackeray on Saturday had claimed that the Centre’s move to reduce excise duty on petrol by Rs 8 per litre and on diesel by Rs 6 per litre was not enough.

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