Another BJP ruled state, Madhya Pradesh has cut retail VAT on petrol and diesel following central government’s request earlier this month. Earlier, Gujarat, Maharashtra and Himachal Pradesh had announced cut n fuel. According to ANI, Madhya Pradesh Shivraj Singh Chouhan said that the state has reduced 3% retail VAT on petrol and 5% on diesel.
The decision to slash prices by the state was taken after the Finance Ministry asked state chief ministers to cut retail VAT rate on petrol and diesel by as much as 5%, following an excise duty cut of Rs 2 per litre on both. Following the slashing of the excise duty on petroleum products, Finance Minister Arun Jaitley had said the Rs 2 per litre cut in excise duty on petrol and diesel was done to give relief from relentless increase in prices and leave more money in hands of consumers. “Now it is up to state governments if they are concerned with the issue (to cut sales tax or VAT),” he had said.
On October 5, Oil Minister Dharmendra Pradhan, then, asked states to follow the Centre’s footsteps in cutting taxes on petrol and diesel. The central government decision to cut the excise duty on petrol and diesel came as a relief to consumers from three-month long relentless price hike. “We have requested all the states (to cut VAT) and I and sure that all the states will revisit their tax structure. Consumer interest is top priority. Just like excise Duty has been cut by the Centre keeping consumer interest in mind, states would also follow suit,” he had said.
While Gujarat, Maharashtra, Himachal Pradesh and Madhya Pradesh have slashed petrol and diesel prices, the Bihar government wants the central government to lower the ‘base price’. On October 9, Bihar Chief Minister Nitish Kumar had said that his government will appeal to the Centre to lower the ‘base price’ of petrol and diesel which stands at Rs 55 a litre in the eastern Indian state. “While base price of petrol and diesel in Bihar stands at INR 55 a litre, the same is INR 51 a litre in Jharkhand. We will make a strong plea to the Union Petroleum Ministry to lower this base price,” Nitish Kumar said.