Facing pressure to reduce Value Added Tax (VAT) on petrol and diesel, Rajasthan Chief Minister Ashok Gehlot on Saturday reiterated his demand that the Centre further slash additional excise duty, special excise duty and cess on fuel for providing relief to common people from the rising inflation.
Several Bharatiya Janata Party-ruled States have reduced VAT rates after the Centre’s decision to cut excise duty on petrol by ₹5 per litre and on diesel by ₹10 per litre on Thursday. However, Mr. Gehlot has maintained that the VAT collection of States had automatically reduced in a proportionate manner after the Centre’s move.
Mr. Gehlot said the excise duty reduction had led to a loss of ₹1,800 crore per year in VAT revenue to Rajasthan, which was yet to receive the goods and services tax compensation of ₹5,963 crore from the Centre. He said the Centre had already reduced the share in excise duty which was earlier available to all State governments.
“At the same time, the Centre should direct the oil companies not to make the daily increase in petrol and diesel prices. Or else, the oil companies may increase the prices after the Diwali festival and after the Assembly elections in five States, nullifying the benefit of relief extended by the Central and State Governments,” Mr. Gehlot said in a message posted on Twitter.
The Chief Minister pointed out that the State Government had reduced 2% VAT on petrol and diesel in this year’s Budget, leading to a revenue loss of ₹1,000 crore. After the Centre’s decision, the total loss amounts to ₹2,800 crore a year.
BJP State president Satish Poonia said it was the Congress government’s turn to give succour to the people by bringing down the VAT rates being levied in Rajasthan, which were the highest in the country. “Other States have reduced the VAT. Mr. Gehlot should abjure political rhetoric and follow suit,” Mr. Poonia said.
