Even if neighbouring Rajasthan decided to cut Value Added Tax (VAT) on petrol and diesel following continuous hike in the petroleum products, there wouldn’t be any change in tax structure on these two commodities in the Prime Minister’s home-State Gujarat.
Ruling out any possibility of reduction in tax in near future, Deputy Chief Minister Nitin Patel on Friday said that the Gujarat Government had reduced VAT around 10 months back on petrol and diesel and now taking 20 per cent tax.
In Congress ruled states VAT was being charged on the fuels in the range of 25-30 per cent, said Patel in context of Congress party’s recent ‘Bharat Bandh’ on the issue of surging fuel prices.
In Gujarat petrol prices have crossed Rs 80 and Rs 78 per litre respectively. Chief Minister of neighbouring Rajasthan has announced a 4 per cent point reduction in VAT on the two important petroleum products earlier this week. In Rajasthan VAT on petrol will be reduced from 30 per cent to 26 per cent and on diesel from 22 per cent to 18 per cent. Congress ruled Punjab and Karnataka too reportedly planning to reduce VAT on petroleum products. Andhra Pradesh and West Bengal have also lowered VAT on fuels.
It is worth mentioning that the Central Government is collecting Rs 19.48 and Rs 15.33 as excise duty on a litre of petrol and diesel respectively. The Narendra Modi Government at Centre is attributing skyrocketing prices of petrol and diesel to external factors such as depreciating rupee and volatile crude prices in the international market. The Central Government has so far not given any indication in reducing the taxes on fuels. In fact the Union Government has asked those States who are charging higher VAT on petroleum products should reduce the tax.