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On Burning Issue of VAT on Fuels, Oppn Says Not Right to Blame States; Hardeep Puri Quips ‘Truth Hurts’

PM Modi had listed out states, which have not reduced VAT on fuel during hikes. He said states like Maharashtra, West Bengal, Telangana, Andhra Pradesh, Tamil Nadu, Kerala, and Jharkhand did not agree to slash VAT on fuel for some reason. (File Photo)

PM Modi had listed out states, which have not reduced VAT on fuel during hikes. He said states like Maharashtra, West Bengal, Telangana, Andhra Pradesh, Tamil Nadu, Kerala, and Jharkhand did not agree to slash VAT on fuel for some reason. (File Photo)

Rahul Gandhi said ‘Modi's federalism is not cooperative, it’s coercive’. Mamata Banerjee said her government spent Rs 1,500 crore to subsidise fuel. Meanwhile, Puri said why did the Maharashtra government not reduce VAT to provide relief to people?

Opposition leaders have reacted sharply to Prime Minister’s comments during a live telecast on Wednesday on states not reducing VAT on petrol and diesel despite the Centre slashing excise duty. Former finance minister P Chidambaram said on Thursday it would be interesting to know why the finance ministry “embarrassed” PM Modi by putting out the information on the day he chose to “admonish” the states.

“It will be interesting to know why the MoF embarrassed the PM on the day he chose to admonish the states!” he said. The finance ministry had said the Centre owed Rs 78,704 crore to states, Chidambaram said. “The amount owed is actually more. If you add the amounts that the states claim are owed to them, the total amount may be bigger. Only the Controller of Government Accounts (CGA) can certify the correct amount,” the senior Congress leader said on Twitter.

Meanwhile, Rahul Gandhi took a swipe at the Centre over high fuel prices and shortage of coal and said “Modi’s federalism is not cooperative, it’s coercive”.

PM Modi had listed out states, which have not reduced VAT on fuel during hikes. He said states like Maharashtra, West Bengal, Telangana, Andhra Pradesh, Tamil Nadu, Kerala, and Jharkhand did not agree to slash VAT on fuel for some reason. “The burden of high prices continued to stay on the citizen.”

Now, the states have one by one hitting out at the PM. West Bengal chief minister Mamata Banerjee said on Wednesday that her government has spent Rs 1,500 crore in the last three years to subsidise fuel in the state. “Today’s interaction with Prime Minister Narendra Modi was completely one-sided and misleading. The facts shared by him were wrong. We have been providing a subsidy of Re 1 on every litre of petrol and diesel for the last three years. We have spent ₹1,500 crore on this,” PTI quoted Banerjee as saying.

Telangana minister KT Rama Rao said the state has not increased VAT on fuel since 2014 and “rounded off only once”. He said calling out states for not reducing VAT even though they did not increase it is “not cooperative federalism”.

Maharashtra chief minister Uddhav Thackeray also slammed PM Modi and blamed the Centre for “step-motherly treatment” to the state who is a major contributor to the country’s development.

“It is not correct that prices of petrol and diesel are going up because of the state government’s VAT,” Thackeray said.

According to India Today, the Chief Minister’s Office said Maharashtra collects the highest GST of 15% in the country, combining both direct taxes and GST, the state is number one in the country.

Shiv Sena leader Priyanka Chaturvedi on Twitter said, “The central government has earned 26 lakh Crore out of central excise on fuel, increased 18 times even when oil prices hit rock bottom. The GST share to states still owed, compensation component to state done away with and now pointing fingers.”

Meanwhile, Union minister Hardeep Singh Puri took to Twitter on Thursday and said “truth hurts, and facts speak for themselves” in direct attack on the Thackeray government. “Maharashtra Govt has collected ₹79,412 crore as fuel taxes since 2018 & is expected to collect 33,000 cr this year. (Adding up to a whopping ₹1,12,757 crore). Why did it not reduce VAT on petrol & diesel to provide relief to people?”

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