The Hindu : National : Gujarat cuts VAT on petrol, diesel and LPG

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Wednesday, Jun 11, 2008
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Gujarat cuts VAT on petrol, diesel and LPG

Special Correspondent

GANDHINAGAR: The Gujarat government has reduced the Value Added Tax (VAT) on petrol, diesel and cooking gas(LPG) to provide some relief to the consumers in the State.

Announcing this here on Tuesday, the Health Minister and the cabinet spokesman, Jaynarayan Vyas, and the Minister of State for power, Saurabh Patel, said the VAT on petrol and diesel had been reduced by three per cent each while the entire four per cent VAT on cooking gas was withdrawn by the State government.

Mr. Vyas said the tax cut would make petrol cheaper by Rs. 1.38 per litre and diesel by one rupee per litre, while the cooking gas would now cost Rs. 13.05 less per cylinder. He said the State government decided to provide some relief to the people despite itself shouldering an additional burden of over Rs. 1,450 crore due to the price rise of petrol and other petroleum products imposed by the the Centre.

In response to the appeal by the BJP national president, Rajnath Singh, to the BJP-ruled States, the Narendra Modi government had appointed a four-member cabinet sub-committee under the chairmanship of Finance Minister Vajubhai Vala to recommend measures to provide some relief to the people from the “back-breaking” hike in the petrol, diesel and cooking gas prices. The sub-committee’s report was considered at the State cabinet meeting held here on Tuesday under Mr. Modi’s chairmanship and approved the VAT cuts on petrol, diesel and cooking gas.

Analysing the economic impact on the State government caused by the UPA government’s “faulty policies” on petrol and petroleum products, Mr. Vyas said besides the Rs. 530-crore loss due to the reduction of VAT on the three products, the State would suffer a notional loss of Rs. 470 crore due to reduction in share of customs and central excise from the Central pool. It would suffer an additional Rs. 450-crore burden as a consumer of petrol and diesel to carry out developmental activities.

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