BJP-ruled states cut VAT on petrol/diesel; Kerala says 'no'

Call it the bypoll effect or Diwali bonanza, the Centre on Wednesday (November 3) cut the excise duty on petrol and diesel by Rs 5 and Rs 10 respectively. It’s estimated the move would cost the government ₹ 1.4 lakh crore annually.

In New Delhi, petrol rates fell to 103.97, while diesel rates dropped to ₹ 86.67, as per Indian Oil Corporation. On Wednesday, petrol and diesel prices were ₹ 110.04 and ₹ 98.42 per litre respectively in New Delhi, at all-time high.

“The government of India has taken a significant decision of reducing fuel Central Excise Duty on petrol and diesel by Rs 5 and Rs 10 respectively from tomorrow. Prices of petrol and diesel will thus come down accordingly,” an official statement said.

Later, the Centre has asked the states to reduce value-added tax (VAT) on petrol and diesel.

Soon after the announcement, nine BJP/NDA-ruled states such as Assam, Goa, Tripura, Karnataka, Uttarakhand, Manipur, Gujarat, UP and Bihar reduced VAT on fuel. However, Kerala, ruled by the Left, said it cannot reduce fuel prices further. It remains to be seen if Opposition-ruled states like Tamil Nadu, Punjab or West Bengal will follow the Centre’ directive by slashing the prices.

“After having steadily increased the petrol/diesel prices over the months, the Centre reduced the price. It’s nothing but an eye-wash. We won’t slash VAT further,” said Kerala Finance Minister KN Balagopal.

Odisha’s ruling Biju Janta Dal also announced a VAT reduction of ₹ 3 per litre on both petrol and diesel.

Goa CM Pramod Sawant, one of the first to take the initiative, announced that his government would cut an additional Rs 7 on petrol and Rs 7 on diesel, thereby reducing the price of diesel by Rs 17 per litre and petrol by Rs 12 per litre.

The Karnataka government too announced a reduction in VAT by Rs 7 each on petrol and diesel, followed by Assam, which cut VAT on petrol and diesel by Rs 7 each.

In Karnataka, petrol will be priced Rs 95.50 a litre and diesel Rs 81.50. The reduced prices will come into effect from Thursday.

• Uttarakhand: Petrol price will go down by ₹7 per litre
• Assam: Rs 7 cut, petrol/diesel
• Goa: Rs 7 cut, petrol/diesel
• Tripura: Rs 12 cut, petrol and Rs 17 for diesel
• Gujarat: Rs 7, cut for petrol/diesel
• Uttar Pradesh: Rs 12, cut for petrol/diesel