Maharashtra Chief Minister Eknath Shinde on Monday said the state government will reduce value-added tax (VAT) on petrol and diesel. A decision to reduce VAT on fuel will be taken in the state Cabinet, Shinde informed the Legislative House, while replying to a debate after he won the floor test.
In Mumbai, the price of petrol currently stands at Rs 111.35 per litre and that of diesel at Rs 97.28 per litre. Mumbai has the highest petrol price in the country.
The Maharashtra government had also cut the state-imposed tax on petrol and diesel by Rs 2.08 per litre and Rs 1.44 per litre at the end of May. The move had come after the central government on May 21 announced a tax reduction on petrol by Rs 8 per litre and on diesel by Rs 6 per litre. Union Finance Minister had also urged the states to follow the suit by cutting state levies on the vehicle fuels.
Explaining the decision, finance minister had said the excise duty cut has entirely been made in Road & Infrastructure Cess (RIC). “Basic ED which is shareable with states has not been touched. Therefore, the entire burden of these two duty cuts (made in Nov, 21 and yesterday) is borne by the Centre,” she added.
The fuel prices in India on Monday remained steady for 43rd day in a row. Since the central government cut down the excise duty on May 27, the petrol and diesel prices have remained stable. After the move, apart from Maharashtra, Kerala and Rajasthan had also cut the prices on petrol and diesel by reducing VAT.
Earlier, in November last year also, the central government had reduced the excise duty on petrol and diesel by Rs 5 per litre and Rs 10 per litre, respectively. Most BJP-ruled states had also cut down on VAT.
However, in April, the Opposition-ruled states rejected Prime Minister Narendra Modi’s suggestion to cut VAT on fuel as a relief measure for the people. The Opposition-ruled states, had refused earlier as well, saying it would have a huge negative impact on their revenue.
Finance Minister Nirmala Sitharaman last week said the government will review every fortnight the new taxes levied on crude, diesel and ATF based on international prices. She said these are “extraordinary times” and oil prices are internationally unbridled. “We do not want to discourage export, but want domestic availability to increase,” Sitharaman had said.
Maharashtra Chief Minister Eknath Shinde on Monday won the crucial floor test in the state Assembly on the last day of the two-day special session of the House. In the 288-member House, 164 MLAs voted for the motion of confidence, while 99 voted against it. Three legislators abstained from voting, while 21 legislators, including Congress’s Ashok Chavan and Vijay Wadettiwar, were absent during the trust vote. Last month, Eknath Shinde launched a rebellion against the Shiv Sena.