States Should Reduce VAT On Fuel, Says Oil Minister
Finance Minister Arun Jaitley will write to states seeking a cut in VAT.
Petroleum Minister Dharmendra Pradhan asked states to reduce the value-added tax on petrol and diesel after the central government cut excise duty to cushion the impact of rising crude prices.
“States are the ultimate beneficiary of the tax structure. I request all the states to take responsibility and reduce VAT on fuel by 5 percent for consumer interest,” he said at a press conference today. Pradhan said Union Finance Minister Arun Jaitley will write to states on this.
The government reduced the basic excise duty on petrol and diesel by Rs 2 per litre yesterday. The duty on petrol had doubled to Rs 21.48 a litre in the last three years, and quadrupled to Rs 17.3 per litre for diesel. That kept retail prices near three-year high even as crude fell by half.
“We had requested the finance ministry to reduce the excise duty,” Pradhan said. The net price of petrol has now come down by Rs 2.5 and diesel by Rs 2.35 a litre, Pradhan said.
After the excise duty cut, petrol price in Delhi fell from 70.83 a litre to Rs 68.38 and diesel from 59.07 to Rs 56.89.
The duty cut will cause a revenue loss of about Rs 26,000 crore for the full year, and Rs 13,000 crore in the remaining part of the ongoing financial year, a statement issued by the Central Board of Excise and Customs said yesterday.
