All National Democratic Alliance-ruled states and union territories (UT) have slashed Value Added Tax (VAT) on vehicular fuel since November 4 when Prime Minister Narendra Modi announced a cut in excise on petrol and diesel by Rs 5 and Rs 10 respectively.
A total of 18 states and 6 union territories (UTs) have reduced state taxes on petrol and diesel in response to PM Modi’s appeal to states to bring down VAT on fuel to give relief to the common man. The states that reduced VAT are Gujarat, Uttar Pradesh, Bihar, Haryana, Karnataka, Madhya Pradesh, Himachal Pradesh, Tripura, Manipur, Goa, Assam, Uttarakhand, Sikkim, Mizoram, Nagaland, Meghalaya, Arunachal Pradesh and Biju Janata Dal-ruled Odisha. Six union territories — including Chandigarh, Jammu and Kashmir, Ladakh, Puducherry, Lakshadweep and Dadra and Nagar Haveli and Daman and Diu — have also cut VAT on fuel.
States and Union Territories that have not responded favourably to the PM’s appeal include Maharashtra, Tamil Nadu, West Bengal, Punjab, Telangana, Andhra Pradesh, Kerala, Jharkhand, Chhattisgarh and Delhi.
Petrol price in Delhi, after the excise duty cut, stands at Rs 103.97 a litre and diesel is priced at Rs 86.67. In Chennai, petrol price was reduced to Rs 101.40/litre while diesel costs Rs 91.43. In Mumbai, petrol now costs Rs 109.98 per litre and diesel Rs 94.14. In Kolkata, petrol is priced at Rs 104.67 and diesel at Rs 89.79.
Gujarat, Manipur and Assam slashed VAT by Rs 7 a litre while Haryana, Uttar Pradesh, and Karnataka declared that with a major cut in VAT, compounded by excise cut, fuel prices in their states have come down by Rs 12 per litre each.
Under fire for constantly rising fuel prices, the Centre on November 4 (Diwali) cut excise on petrol and diesel by Rs 5 and Rs 10 respectively. Central excise duty and state taxes like VAT have played an important role in fuel prices spiralling since May 2020, when reduced revenue collections from other sources due to COVID lockdown forced governments to look for alternative sources of income. The excise duty on petrol and diesel went up by Rs 13 per litre and Rs 16 per litre respectively last year, which significantly added to fuel prices going through the roof. Several states also jacked up VAT on fuel to make up for the losses incurred amid falling Goods and Services Tax collections. VAT hike constituted for a surcharge of anything between Rs 5 and Rs 17 on both the fuels.