State cuts Value-Added Tax on fuel by Rs. 2 per litre

Mae Love
September 12, 2018

Speaking to a news agency, Parbhani District Petrol Dealers Association (PDPDA) President Sanjay Deshmukh said that the petrol cost was hitting the psychological barrier of Rs 90 per litre while diesel was sold at Rs 77.92.

President Sanjay Deshmukh told IANS that while petrol was almost touching the psychological barrier of Rs 90 per litre (at Rs 89.97), diesel prices stood at Rs 77.92 on Monday.

Meanwhile, Rajasthan government announced a 4 per cent cut in the state VAT on petrol and diesel on Sunday to reduce their prices by Rs 2.5 per litre in the state, while Andhra Pradesh government on Monday announced a reduction of tax on petrol and diesel by Rs 2 a litre, to reduce the burden on common caused by zooming fuel prices.

The Congress party along with other Opposition parties called a nationwide strike across the country on Monday to protest against the rising prices of petrol and diesel and the falling value of the rupee against the U.S. dollar.

Reeling out statistics on "abnormal increase" in taxes levied by the Centre during the last four years, Mr. Naidu said the Central government had collected Rs. 23 lakh crore.

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"Bringing oil in GST is not a solution".

The tax ratio can be raised not by increasing rates but by bringing evaders and non-filers in tax net. At a time the Centre increased the tax by more than 90% and filled its coffers at the cost of the economy. "2008-2014, it was static", he said. "If we expand the tax base in the same proportion as we did previous year, then non-oil GDP ratio will go up", he said. Of this, 50 per cent is non-oil and 50 per cent is oil. "Currently, Centre compensates states based on the 14 per cent growth in tax revenue".

Since states levy Value-Added Tax as ad valorem duty, a rise in prices has increased their profits. A litre of petrol in the national capital now costs Rs 80.87, while it is Rs 88.26 in Mumbai. The petitioner, through her counsel A Maitri, has also alleged that fuel prices are politically controlled.

In the 13 days between August 29 and September 10, petrol and diesel prices have risen daily; in the case of petrol from Rs 81.45 to 84.06, and in the case of diesel from Rs 74.74 to Rs 77.98.

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