Prime Minister Narendra Modi’s home state Gujarat has become the first state to cut retail VAT rates on petrol and diesel prices, a day after the Finance Ministry asked states to do so, TV new reports said without citing any source. The state government is likely to make the announcement soon. Gujarat levies 28.96% VAT on both petrol and diesel.
Yesterday, Petroleum Minister Dharmendra Pradhan said that the Finance Ministry has asked state chief ministers to cut Retail VAT on Petrol and Diesel by as much as 5%. It should be noted that major states in the country, including Gujarat, are currently ruled by National Democratic Alliance, there is a chance that other states go ahead with tax cut as well. The move comes a day after the government cut basic excise duty on petrol and diesel by Rs 2 per litre in a move to provide some respite to the people regarding their travel bills soaring over recent months.
The cut in taxes came as petrol and diesel prices have continued to rise despite oil minister Dharmendra Pradhan having said two weeks ago that the retail fuel prices would ease out in a few days. As of Tuesday, October 3, 2017, petrol price in Delhi had risen by 50 paise per litre, and was at Rs 70.88 per litre in New Delhi. The price of diesel had also seen a similar rise since 13 September. Diesel was being sold in Delhi at Rs 59.14 per litre on Tuesday.
However, after the cut in excise duty, petrol price has fallen as much as Rs 2.5 per litre to Rs 68.38 per litre from today, Wednesday, 4 October, in Delhi at Indian Oil Corp petrol pumps. While the price of diesel is set at Rs 2.25 per litre to Rs 56.89 per litre.