New Delhi, Oct 4: In a bid to provide some relief to consumers, Finance Minister Arun Jaitley on Wednesday urged states to cut sales tax or VAT on fuel prices.
Jaitley, who is on three-day official visit to Bangladesh, said the Rs 2 per litre cut in excise duty on petrol and diesel was done to give relief from relentless increase in prices adding, but “Now it is up to state governments if they are concerned with the issue (to cut sales tax or VAT)”.
His remarks comes soon after Petroleum Minister Dharmendra Pradhan said Jailtey will write to all state Chief Ministers urging them to cut sales tax, or value added tax (VAT), on petrol an diesel.
“We have proactively cut excise duty. Now it is the turn of states to reduce VAT,” Pradhan said.
Pointing out that states impose VAT ranging from 26 per cent to 38 per cent on fuel, the minister further added “I urge all states to reduce VAT by 5 per cent in line with the cut in central excise duty to provide farmers and consumers with one more slab of relief.”
Under pressure on rising fuel prices, the government on Tuesday decided to reduce the excise duty on petrol and diesel by Rs 2 per litre — effective Wednesday — to cushion the impact of rise in international crude prices, in a decision that will cost the central exchequer Rs 13,000 crore during the remaining part of the fiscal.
Earlier, due to the increase in the international prices of petrol and diesel during the last few weeks, the retail selling prices of petrol and diesel in Delhi had risen to Rs 70.83 a litre and Rs 59.07 per litre, respectively, as on October 2, Ministry said in its statement.