Maharashtra Govt to reduce VAT on fuel, says CM Eknath Shinde

The CM recalled the Shiv Sena-led Maha Vikas Aghadi (MVA) government didn’t reduce VAT on fuel, though it slashed it for natural gas

Sanjay JogUpdated: Monday, July 04, 2022, 11:48 PM IST
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Maharashtra: MVA, BJP square off on reduction in VAT on petrol and diesel |

Mumbai: Amid the growing concern over oil prices and its cascading effect on the economy, petrol and diesel will soon become cheaper in Maharashtra as the new state government has proposed to reduce the value added tax (VAT) on it. The windfall was announced by Chief Minister Eknath Shinde after winning the vote of confidence in the state assembly on Monday. The CM recalled the Shiv Sena-led Maha Vikas Aghadi (MVA) government didn’t reduce VAT on fuel, though it slashed it for natural gas.

In Mumbai, the price of petrol currently stands at Rs 111.35 per litre and that of diesel at Rs 97.28 per litre. Mumbai has the highest petrol price in the country.

Shinde’s announcement is important as the MVA government on May 22 had reduced VAT by Rs 2.08 per litre on petrol and Rs 1.44 per litre on diesel, saying that whatever was possible has been done. The government had estimated an annual loss of revenue of Rs 2,400 crore and another Rs 1,100 crore following a cut in VAT on natural gas to 3 per cent from 13.5 per cent.

The MVA government’s move came after the Central government on May 21 announced a tax reduction on petrol by Rs 8 per litre and on diesel by Rs 6 per litre. The MVA government and former Deputy Chief Minister Ajit Pawar, who held the planning and finance departments, had strongly defended the state government’s move. Pawar had noted that even though the Centre’s excise collection is huge the states get peanuts from the Centre.

However, former leader of opposition Devendra Fadnavis had claimed that the state government’s VAT cut on petrol and diesel was “absolute cheating”. He had said 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.

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

Price in Mumbai today

Petrol: Rs 111.35/lt

Diesel: Rs 97.28/lt

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