Petrol diesel price reduce by Gujarat government cutting VAT

Today to attract voters in the poll-bound Gujarat, the BJP government has announced a 4% reduction of VAT (Value Added Tax) on diesel and petrol price. Petrol will be cheaper by Rs 2.93 per litre and diesel by Rs 2.72 per litre in Gujarat. The state collects a 28.96% VAT on petrol and diesel.

“After the central government’s instructions, Gujarat has decided to reduce VAT on petrol and diesel by 4 per cent effective from tonight,” Rupani said to media in a press conference held today morning in Gandhinagar.

New price of petrol in Gujarat will be Rs 66.53 per litre and of diesel Rs 60.77 per litre.

Reduction in fuel price incur a loss of Rs 2,316 crores to the state government exchequer with this announcement.

Earlier this month, the central government had for the first time in its tenure reduced the excise duty on petrol and diesel prices and asked the state governments to do the same with VAT.

Union Finance Minister Arun Jaitley said the Rs 2 per litre cut in excise duty on petrol and diesel was done to give relief from relentless increase in prices and leave more money in hands of consumers. “Now it is up to state governments if they are concerned with the issue (to cut sales tax or VAT),” he said.

Oil Minister Dharmendra Pradhan had also said states should cut sales tax or VAT on petrol and diesel by 5 per cent.