Gandhinagar: Gujarat government, on Tuesday, announced a reduction of 4 per cent in VAT (Value added Tax) on petrol and diesel.
Chief Minister Vijay Rupani made announcement to this effect after which poll-bound Gujarat has become the first state to cut VAT on fuel after the central government has urged states to do so.
As a result, now the prices of petrol and diesel will get cheaper by Rs 2.93 and Rs 2.72 respectively in Gujarat. Informatively, Maharashtra government had also shown its intent to reduce VAT on petro products.
Earlier this month, Petroleum Minister Dharmendra Pradhan had stated, "We have proactively cut excise duty. Now it is the turn of states to reduce VAT."
Noting that states impose VAT ranging from 26 per cent to 38 per cent on fuel, the minister 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."
Pradhan had also stated that the Centre has sacrificed Rs 26,000 crore in revenue in the cut in excise duty.
"States are the biggest beneficiaries. They get all of the VAT collection plus they also get 42 per cent of the central excise collections. The amount remaining with the Centre is used to finance centrally sponsored schemes in states," he said.