According to officials, the move will reduce annual revenue from taxes on fuel, estimated at Rs 31,000, to Rs 6,000. CM Eknath Shinde said his government would ensure no development was cut due to loss of revenue. Deputy CM Devendra Fadnavis called the decisive part of Government of Shiv Sena-BJPcommitment to the people.
After taking office, Shinde announced that his government would reduce VAT on gasoline and diesel. “Prime Minister Modi announced the reduction of the central tax on fuel in November and May and he has called on the states to also extend the relief at the end of their period. Many states have given relief, but Maharashtra Shinde said.
Fuel tax cuts to save ordinary people: CM
Transporters breathed a sigh of relief on Thursday following the state government’s decision to reduce taxes on fuel. “Currently, some trucks and other vehicles go to neighboring states to get gas at a cheaper price. Bal Malkit Singh of the All India Motor Transport Congress said the price reduction from Friday was the right move by the state government to bring about price parity with neighboring states.
The decision was made during the second meeting of the two-member cabinet, CM Eknath Shinde and deputy CM Devendra Fadnavis. “The heart of our government is ordinary people and so we made this bailout decision,” said Shinde. Previously, the Thackerayled government had refused to reduce VAT, saying that the state did not have enough funds to comply with the Prime Minister’s request because the Center had not yet transferred the pending GST charges.
However, the MVA government has reduced the VAT on CNG and pipeline gas from 13.5% to 3%. Officials said the cuts would cost Rs 2,500 crore annually from petrol and Rs 3,500 from diesel. The government levied a 26% VAT plus Rs 10.12 tax on petrol, which has now been reduced to a 26% VAT plus Rs 5.12. For diesel engines, the tax rate has been reduced from 24% VAT + Rs 3 to just 24% VAT. Reacting to the decision, petrol agent Kedar Chandak said, “This discount does not include the state VAT which the percentage (percentage) remains the same even after the price revision.”
Chandak asked the government to completely eliminate taxes on gasoline, as it does on diesel. “They could have reduced the petrol tax rate to Rs 10 because the tax rate is something the government decided to charge higher and higher than VAT to earn more revenue,” he said. Parliamentary Secretary General Sachin Sawant on Thursday studied the decision calling it a meager tax break. When the MVA took power, the BJP asked for a 50% reduction in VAT on gasoline and diesel, he said.