On November 3, the Centre had announced a tax cut on the eve of Diwali where excise duty on petrol was reduced by Rs 5, and the excise duty on diesel was cut by Rs 10. Following the announcement, as many as 25 states, most of them ruled by the NDA government and Union Territories have undertaken value-added tax (VAT) reduction.
BJP-ruled states like Gujarat, Uttar Pradesh, Karnataka, Tripura, Goa, Uttarakhand, Manipur, Assam, Bihar and Haryana announced VAT reduction hours after the Centre’s excise cut on petrol and diesel.
The States which have not lowered their VAT in Petrol and Diesel include Maharashtra, NCT of Delhi, West Bengal, Tamil Nadu, Telangana, Andhra Pradesh, Kerala, Jharkhand, Chhattisgarh and Rajasthan.
Notably, the eleven states which have not undertaken tax reduction of VAT are all non-BJP states. Punjab has witnessed drop in the petrol price by Rs 16.02 per litre after VAT reduction followed by Rs 13.43 in UT of Ladakh and Rs 13.35 in Karnataka.
The price of petrol is cheapest in Andaman & Nicobar at Rs 82.96 per litre and Rs 92.02 per litre in Itanagar, Arunachal Pradesh. However, petrol is priced at Rs 117.45 per litre in Jaipur, Rajasthan and at Rs 115.85 in Mumbai, Maharashtra. Congress is the ruling party in Rajasthan while Maharashtra is ruled by the Congress-Shiv Sena and NCP alliance government.
Diesel price has dropped most in UT of Ladakh by Rs 19.61 per litre, followed by Rs 19.49 in Karnataka and Rs 19.08 in Puducherry. Like petrol, diesel is cheapest in Andaman & Nicobar at Rs 77.13 per litre and at Rs 79.55 per litre in Aizwal, Mizoram. The price of diesel is at Rs 108.39 per litre in Jaipur, Rajasthan and at Rs 107.48 in Vizag, Andhra Pradesh.
Earlier, Pinarayi Vijayan led Kerala government had refused to reduce tax on petrol and diesel after Centre’s tax cut while the Yogi Adityanath government in Uttar Pradesh declared a flat cut of Rs 12 per litre in the prices petrol and diesel. Chief Ministers of Karnataka, Assam, Tripura, Goa, Gujarat, Sikkim and Manipur had announced VAT reduction by Rs 7 per litre on petrol diesel. NDA-ruled Haryana government also reduced VAT, making petrol and diesel cheaper by Rs 12 per litre and Madhya Pradesh announced a reduction of 4 per cent VAT on petrol and diesel. BJP-JD (U) government in Bihar had announced a tax relief of more than Rs 3. BJD ruled Odisha, too, reduced VAT on fuel.
The prices of petrol and diesel have shown a sharp increase in the last few months as a result of the price rise in global oil prices. This in turn has triggered a price rise of almost every other commodity because of cascading effects. Both the excise duty and VAT levied by centre and state governments respectively constitute the major part of the fuel price in India with taxes comprising more than 50% of the retail fuel prices.
