Petrol price, Diesel price, Value Added Tax, VAT,
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Petrol, diesel cheaper: How states have reacted to Centre’s cut on excise duty  

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Petrol and diesel will be cheaper after the Centre’s announcement to cut down on excise duty on petrol by ₹8 per litre and diesel by ₹6 per litre to alleviate the woes of the common man amid inflation.

Revised prices

In Delhi, petrol will be cheaper by 8.65 per litre and diesel by ₹7, and cost ₹96.76 (against the earlier price of ₹105.41 per litre) and ₹89.66 (against ₹96.67 earlier) respectively from Sunday onwards.

Similarly, in Mumbai a litre of petrol will now cost ₹111.33, while motorists in the key metros of Kolkata, Chennai, Bengaluru and Gurugram, would buy it at ₹106.1, ₹102.62, ₹101.92 and ₹97.17 per litre respectively.

A litre of diesel in these cities will now cost ₹97.26 (Mumbai), ₹92.74 (Kolkata), ₹94.22 (Chennai), ₹87.87 (Bengaluru) and ₹90.03 (Gurugram).

According to the All India Petroleum Dealers Association in Bhubaneswar, the cut in excise duty by the Centre paired with the state government’s tax reduction have brought down the prices of the oil to ₹102.25 per litre for petrol and ₹94.86 per litre for diesel.

States take cue, reduce VAT

Soon after Union Finance Minister Nirmala Sitharaman made the announcement, several states including non-BJP ruled ones like

Rajasthan, Kerala and Delhi cut down on Value-added Tax (VAT) on petrol and diesel.

Rajasthan Chief Minister Ashok Gehlot tweeted that the government has reduced the VAT on a litre of petrol by ₹2.48 and diesel by ₹1.16.

“Due to the reduction in the prices of petrol and diesel by the central government, the state government will reduce VAT by ₹2.48 per litre on petrol and ₹1.16 per litre on diesel. With this petrol will be cheaper by ₹10.48 and diesel by ₹7.16 per litre in the state,” he tweeted.

After the price revision, petrol will now cost ₹108.48 per litre in Jaipur while diesel will cost ₹93.72 per litre.

Also read: Petrol, diesel prices reduced as Centre cuts excise duty

The Pinarayi Vijayan government in Kerala also slashed the VAT on petrol by ₹2.41 per litre and diesel by ₹1.36 per litre, revising the prices to ₹107.44 and ₹96.26 respectively.

While announcing the revised prices, Kerala’s finance minister KN Balagopal welcomed the Centre’s decision.

The Arvind Kejriwal-led Delhi government also reduced the VAT on petrol and diesel by ₹6.07 and ₹11.75 per litre respectively.

BJP-ruled states slash VAT by 7%

The Centre’s slashing of excise duty on fuel was lauded by BJP-ruled states like Goa, Assam, Gujarat, Tripura, Manipur, Karnataka, Uttar Pradesh and Haryana which announced a further reduction of ₹7 per litre on VAT on petrol and diesel.

“The Modi Govt. has given a great Diwali gift to all Indians by announcing reduction in Excise Duty on Petrol and Diesel… In addition, Government of Goa shall reduce an additional ₹7 on Petrol and ₹7 on Diesel, thereby reducing the price of diesel by ₹17 per litre and petrol by ₹12 per litre,” tweeted Goa Chief Minister Pramod Sawant.

“The decision to reduce the excise duty on petrol and diesel duty by Prime Minister Narendra Modiji is a joyous news. The decision will be beneficial for all sections of the society (sic),” tweeted Uttar Pradesh Chief Minister Yogi Adityanath.

Tamil Nadu, Maharashtra harshest critics

While the Centre’s decision has not been appreciated by Congress-ruled states, the most vociferous of the critics have been states like Maharashtra and Tamil Nadu.

Maharashtra Chief Minister Uddhav Thackeray criticised the Centre for hiking the excise duty on petrol to an “exorbitant rate” and then effecting a “nominal” slash in rates.

“The central government had hiked excise duty on petrol by ₹18.42 per litre two months ago and today it has reduced ₹8. Excise duty on diesel was also increased by ₹18.24 and has now been reduced to ₹6,” Thackeray said.

He said the Centre should ideally reduce the excise duty of fuel to what it was six or seven years ago.

Tamil Nadu’s finance minister P Thiaga Rajan accused the Centre of unilaterally slashing excise duty on petrol and diesel without taking states into confidence and “exhorting states to cut taxes.”

“The Union Government didn’t INFORM, let alone ASK for ANY state’s view when they INCREASED Union taxes on Petrol ~23 Rs/ltr (+250%) & Diesel ~29 Rs/ltr (+900%) from 2014. Now, after rolling back ~50% of their INCREASES, they’re EXHORTING States to cut. Is this Federalism?” he tweeted.

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